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The American Economy in the Sixties - History

The American Economy in the Sixties - History


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Years of Change the 1960s and 1970s

Another of Kennedy's goals involved accelerating the U.S. space exploration program so that it would surpass Soviet achievements. Federal spending increases -- resulting from the expanded space program, the escalation of America's role in the Vietnam War and other new or enlarged federal programs -- contributed to prosperity for much of the decade.

Many new social welfare programs were created during the administration of Kennedy's successor, President Lyndon B. Johnson. He launched a "war on poverty" and succeeded in creating programs to provide medical assistance to the poor and elderly as well as other initiatives.

The 1960s were a period in which the American people began to express a growing concern about the natural and human environment -- from the need to preserve natural lands to avoiding the dangers of air and water pollution. The federal government enacted many regulations to protect the quality of life.

But by the end of the 1960s, economic prosperity was being eroded by persistent inflation. The 1973-1974 Arab oil embargo pushed prices rapidly higher and created shortages throughout the United States. Even after the embargo ended, prices stayed high, fueling inflation and eventually causing rising rates of unemployment. The rest of the decade was characterized by spiraling inflation, increased federal budget deficits, intensified foreign competition, high unemployment and stagnant demand.


What were the major challenges faced by increased urban population? One of the biggest issues was sanitation as the poverty-ridden streets of cities were often overcrowded and full of animals and waste. There was plenty of disease and trash everywhere.

The transcontinental railroad was completed in 1869, allowing for increased trade with Asia and opening up the West for expansion. The positives of this railroad revolution is, the railroad stimulated the industrialization of the country in the post-Civil War years.


HISTORICAL TRENDS

Colonial Times

When European colonists first came to the "New World," they found a vast expanse of land inhabited by Native Americans. Many of the first colonies were business ventures called "charter companies" that were financed by wealthy English businessmen and landowners. The colonies were granted limited economic and political rights by the king of England. After profits proved to be disappointing, many of the investors turned over the companies to the colonists themselves. These actions were to have far-reaching consequences on the shape of America. A report titled The U.S. Economy: A Brief History published by the U.S. Department of State (http://usinfo.state.gov/products/pubs/oecon/chap3.htm) notes: "The colonists were left to build their own lives, their own communities, and their own economy."

At first the colonists were preoccupied with merely surviving. Eventually they engaged in commerce with Europe by exploiting the natural resources of their new homeland. The main agricultural products of the colonies were tobacco, wheat, rye, barley, rice, and indigo plant. Other important exports were animal furs, products from fish and whales, and timber. Shipbuilding became a major industry in New England.

Political and Industrial Revolution

Frustrated with the political and economic interference of England, the colonists banded together to forge a new nation—the United States of America. The push for independence from Britain, which culminated in the Revolutionary War (1775–83), was driven by economic and political motivations, including the desire for greater self-governance and tax relief.

In 1776 a book was published in England that would have long-reaching effects on the new United States. Scottish philosopher Adam Smith wrote An Inquiry into the Nature and Causes of the Wealth of Nations. The book was remarkable for many reasons. It discussed economic principles in a commonsense, nonmathematical manner and argued that the forces of supply and demand affect prices and wages. It criticized the restrictions and regulations common in European countries, and it advocated free and open trade within and between countries and abolishment of wage and price controls. Smith believed that an "invisible hand" was guiding workers seeking to better their private finances, which in turn helped nations achieve prosperity. In other words, people who work hard for their own gain unconsciously contribute to national wealth. The principles of a competitive marketplace with little government interference were adopted by the new United States and dominated the nation's economic policy for more than a century.

During the late 1700s Britain and the newly formed United States underwent a major social and economic change from agriculture to industry. The Industrial Revolution saw the introduction of the steam engine, cotton gin, and other machines capable of increasing production while decreasing human labor. Farming, in particular, became much less labor-intensive, freeing up people to pursue other forms of employment. Over the next century the United States would change from an agrarian-based nation to one in which the majority of income was generated by manufacturing, trade, and business providing services to consumers. (See Figure 1.2.)

The 1800s—Expansion and Civil War

The 1800s were a period of enormous growth for the United States in terms of territory, population, and economic might. Settlers spread from the East and South across the Midwest to the West Coast. A massive railroad system was built across the country. Gold was discovered in the western territories. More than two dozen states were added to the union. Expansionism was accompanied by violent conflicts with Britain (the War of 1812), Mexico (the Mexican-American War, 1846–48), and Spain (the Spanish-American War, 1896). In addition, the so-called Indian Wars were waged for many years against Native American tribes.

The Northeast developed thriving industries, and cities swelled with hundreds of thousands of European immigrants. Although the South remained largely rural and agricultural, mechanical innovations, like the cotton gin, changed the region's focus. Cotton became a major crop and was exported to textile mills in the North and overseas. Unfortunately, much of the economic success of the South was based on the use of slave labor.

Deep divisions arose between factions in the North and South on the morality of slavery and associated political and economic issues, which led to the devastating American Civil War in 1861. By the time the war ended in 1865 the factories of the Northeast had become extremely important in fueling America's economy.

The Gilded Age

In 1873 American author Mark Twain cowrote with his neighbor Charles Dudley Warner a novel entitled The Gilded Age, which describes an American society in which unscrupulous businessmen and corrupt politicians pursue quick fortunes at the expense of the common people. Indeed, the decades following the Civil War were characterized by scandals involving high-level politicians making money from crooked business deals, as well as an unprecedented boom in business. The resulting social atmosphere was one of decadence among the upper classes contrasted with poverty and labor unrest among the lower classes.

During the late 1800s the U.S. economy surged on a wave of industrialization and mechanized production. Industries boomed in iron, steel, lumber, precious metals, railroading, and petroleum. Some enterprising businessmen became extremely wealthy during the period, including John D. Rockefeller and Andrew Carnegie. Such men were called "captains of industry" by those who admired them and "robber barons" by those who despised them.

The U.S. government had a hands-off approach to business regulation, a tactic described by the French term laissez-faire (leave alone or "do as you please"). It was generally believed that the government should not interfere in economic affairs but should instead allow supply and demand and competition to operate unfettered, resulting in a "free market."

The gilded age is notable for a growth in corporations. A corporation is a legally defined entity that may receive financial support from numerous investors but is treated as an individual under the law. A corporation is granted a state charter including specific rights, privileges, and liabilities. This type of business organization became very popular in the late 1800s. It allowed people to invest in businesses without taking on all of the responsibilities and risks of being a business owner. State charters limited the liability of individual investors, who were paid dividends in proportion to their share of investment in the corporation.

Some corporations grew through mergers or by buying out the companies of their competitors. Then they developed a business structure called a trust, in which the component companies were managed by a small group of people called a board of trustees. These corporations controlled nearly all of the business in their respective industries, a condition known as monopolization. The public feared that trusts squelched competition that helped keep prices in check. In 1890 the U.S. Congress passed the Sherman Antitrust Act. Its stated purpose was "to protect trade and commerce against unlawful restraints and monopolies." But due to court challenges, the law was not successfully applied until the early 1900s.

Panics and Depressions

In economic terms a "panic" is a widespread occurrence of public anxiety about financial affairs. People lose confidence in banks and investments and want to hold onto their money instead of spending it. This can lead to a severe downturn, or depression, in the economic condition of a nation. The U.S. economy suffered from panics and depressions even during the booming growth of the 1800s and early 1900s. Although economists argue about the exact definitions of panics and depressions, in general it is agreed that economic downturns occurred in the United States in 1819, 1837, 1857, 1869, 1873, 1893, and 1907.

The crises were triggered by a variety of factors. Common problems included too much borrowing and speculation by investors and poor oversight of banks by the federal government. Speculation is the buying of assets on the hope that they will greatly increase in value in the future. During the 1800s many speculators borrowed money from banks to buy land. Huge demand caused land prices to increase dramatically, often above what the land was actually worth in the market. Poorly regulated banks extended too much credit to speculators and to each other. When a large bank failed, there was a domino effect through the industry, which caused other banks and businesses to fail.

A panic or depression results in a downward economic spiral in which individuals and businesses are afraid to make new investments. People rush to pull their money from banks. As panic spreads, banks demand that borrowers pay back money, but borrowers may lack the funds to do so. Consumers are reluctant to spend money, which negatively affects businesses. Demand for products goes down, and prices must be lowered to move merchandise off of shelves. This means less profit for business owners. Businesses lay off employees to cut costs and do not hire new employees. As more people become unemployed or fearful about their jobs, there is even less spending in the marketplace, which leads to more business cutbacks and so forth. The cycle continues until some compelling change takes place to nudge the economy back into a positive direction.

The Twentieth Century Begins

The early twentieth century was a time of social and political change in the United States. Public disgust at the corruption and greed of the gilded age encouraged a movement called progressivism. Progressives promoted civic responsibility, workers' rights, consumer protection, political and tax reform, "trust busting," and strong government action to achieve social improvements. The progressive era greatly affected the U.S. economy because of its focus on improving working conditions for average Americans. Successes for the progressives included child labor restrictions, improved working conditions in factories, compensation funds for injured workers, a growth surge in labor unions, federal regulation of food and drug industries, and the formation of the Federal Trade Commission to oversee business practices.

Some people viewed the progressive movement as an attack on capitalism and a prelude to socialism. The American economy was first described as "capitalist" by the German economist Karl Marx (1818–83), who used the term to describe an economy in which a small group of people control the capital, or money available for investment, and, by extension, control the power within the economy. A common criticism of capitalism was that it favored profits over the well-being of workers. Marx advocated a socialist system in which wealth and property were not held by a few individuals but were equally distributed among all workers under a heavily planned economy. The socialist movement gained some momentum during the progressive era, thanks in large part to its ties to organized labor. In the presidential election of 1912 the socialist candidate Eugene V. Debs garnered more than nine hundred thousand votes—around 6% of the popular vote. But socialism soon faded as a serious challenge to American capitalism.

Despite its laissez-faire attitude, in 1913 the federal government took two actions that were to have long-lasting effects on the U.S. economy:

  • Establishment of the Federal Reserve System to serve as the nation's central bank, furnish currency, and supervise banking
  • Ratification of the Sixteenth Amendment to the U.S. Constitution authorizing the collection of income taxes

World War I and Inflation

In 1914 World War I began in Europe. The U.S. entered the conflict in April 1917 and was engaged until the war ended in November 1918. Although the nation spent only nineteen months at war, the U.S. economy underwent major changes during this period.

It is sometimes said that "war is good for the economy" because, during a major war, the federal government spends large amounts of money on weapons and machinery through contracts with private industries. These industries hire more employees, which reduces unemployment and puts more money into the hands of consumers to spend in the marketplace. This benefits other businesses not directly involved in the war effort. On the surface, these economic effects appear positive. However, major wars almost always result in high inflation rates.

Inflation is an economic condition in which the purchasing power of money goes down because of price increases in goods and services. For example, if a nation experiences an inflation rate of 3% in a year, an item that cost $1.00 at the beginning of the year will cost $1.03 at the end of the year. Inflation causes the "value" of a dollar to go down over the course of the year. In general, small increases in inflation occur over time in a healthy growing economy, because demand slightly outpaces supply. Economists consider an inflation rate of 3% or less a year to be tolerable. During a major war the supply and demand ratio becomes distorted. This occurs when the nation produces huge amounts of war goods and far fewer consumer goods, such as food, clothing, and cars. This lack of supply and anxiety about the future drive up the prices of consumer goods, making it difficult for people to afford things they need or want.

During World War I the federal government intervened in private industry to support war needs and exert some control over supply and demand dynamics. Agencies were created to oversee the production of war goods, food, fuel, and nonmilitary ships. Although the government tried to impose some level of price control in the food and fuel industries, inflation still occurred. According to the U.S. Census Bureau's Historical Statistics of the United States (1975), the prices for many consumer goods nearly doubled between 1915 and 1920. Figure 1.3 shows the average annual inflation rate from 1914 through 1924. The inflation rate was unusually high from 1916 through 1920, peaking at 18% in 1918. Wartime inflation was particularly hard on nonworking citizens, such as the elderly and sick, because there were no large government programs in place at that time to assist needy people.

A lasting legacy of World War I was the assumption of large amounts of debt by the federal government to fund the war effort. Figure 1.4 shows the enormous differences that occurred between government revenues (receipts) and spending during the war years. In 1919 government spending peaked at nearly $18.5 billion revenues for that year were just over $5 billion. The government made up the difference by borrowing money. One method used was the selling of Liberty bonds. Bonds are a type of financial asset—an IOU that promises to pay back at some future date the original purchase price plus interest.

The Roaring Twenties

The Roaring Twenties began with a whimper there was a severe economic downturn in 1921. But this crisis was followed by several years of robust economic growth. Mass production and the availability of electricity led to huge consumer demand for household appliances. Installment plans became a popular means for middle-class Americans to purchase expensive long-lasting (durable) goods like refrigerators, washing machines, and automobiles.

Americans also began spending more money on entertainment. They bought radios and went in large numbers to see motion pictures and baseball games. The automobile became a necessity, rather than a luxury, for many people. Booming car sales boosted the petroleum and housing markets and allowed city dwellers to move to the suburbs.

The prosperity of the 1920s was not shared by all Americans. During World War I demand for agricultural goods had skyrocketed, particularly in Europe. Overoptimistic farmers borrowed heavily to pay for tractors and other farm equipment, only to see food prices plummet during the 1920s when supply outpaced demand. Financial problems in the agricultural industry directly impacted a lot of Americans. In addition, banks in rural areas were stressed by farmers who were unable to pay back loans. The agricultural crisis was accompanied by downturns in the coal mining and railroad industries that affected many workers.

In the late 1920s the stock market became a major factor in the U.S. economy. Investors were richly rewarded, as stocks increased dramatically in value. Many people took out loans from banks to pay for stock or purchased stock by "buying on margin." In this arrangement an investor would make a small down payment (as little as 10%) on a stock purchase. The remainder of the balance would be paid (in theory) by the future increase in the stock value. Buying on margin was widely practiced by optimistic investors of the time. University of Wisconsin history professor William Tishler notes: "By 1929, much of the money that was invested in the stock market did not actually exist" ("The Crash and the Great Depression," 2000, http://us.history.wisc.edu/hist102/lectures/textonly/lecture18.html).

Black Tuesday—October 29, 1929

On October 29, 1929, the stock market crashed. For months, President Herbert Hoover and other influential people had warned that there was too much speculation in the stock market and that stock prices were higher than the actual worth of the companies. In the fall of 1929 investors began to get nervous. On October 24, 1929, there was a selling frenzy as people tried to get rid of stocks they thought might be overvalued. The day was dubbed "Black Thursday." The following day the market rebounded somewhat, and stock prices climbed back upward. But the recovery was short-lived.

On Tuesday, October 29, 1929, panic selling took place all day. Stock values dropped dramatically. The drawback to buying on margin was that if a stock value went down by a certain amount, the lender would make a "margin call" asking the buyer for more cash up front. If the margin buyer could not pay, the lender sold the stock to recoup the money. As "Black Tuesday" progressed, desperate margin buyers paid lenders all their cash in savings in hopes of saving their stock for the expected recovery, but no recovery came. As stock values fell further, lenders demanded more money. By the end of the day many margin buyers had lost their life savings and their stock. Those who managed to hold on to their stock found it was worth only a fraction of its former value.

According to economist Harold Bierman, Jr., the American stock market lost almost 90% of its value between 1929 and 1932 ("The 1929 Stock Market Crash," August 11, 2004, http://eh.net/encyclopedia/article/Bierman.Crash).

The Great Depression

The United States economy suffered a devastating downturn following the stock market crash. The depression was so deep and lasted so long—more than a decade—that it is called the Great Depression.

Historically, economic depressions had been short downturns with limited consequences. They were temporary dips in an overall trend of American prosperity. The Great Depression was a completely different experience. It brought long-term unemployment and hardship to millions of people. The unemployment rate soared from 3.2% in 1929 to nearly 25% in 1933. (See Figure 1.5.) It remained more than 10% through the end of the 1930s. The public lost confidence in the stock market, the banking system, and big business.

Like all previous depressions, this one included a downward cycle in which businesses reduced spending and production and laid off employees. Unemployed workers and those fearful of losing their jobs cut back on spending, which forced businesses to lay off more people. The economy underwent "deflation"—a condition where a lack of money among consumers depresses demand and pushes prices downward. Lower prices for agricultural and industrial goods hurt farmers and businesses, particularly those with high debt. Consumers also had assumed high levels of debt during the 1920s.

The Great Depression was aggravated by a crisis in the banking industry. Some banks had invested heavily in the stock market using their depositors' money or loaned large amounts of money to stock market investors. These banks failed after the crash, and the depositors lost their savings. Fear of further failures caused "bank runs," in which large numbers of depositors rushed to withdraw their money at the same time. This caused more bank failures, which perpetuated the cycle. In addition, some economists believe that the banking market became over-saturated during the 1920s with underfunded and loosely regulated banks that loaned money too easily. These institutions were already financially troubled before the crash and could not survive the stress.

America's Great Depression was felt worldwide, particularly in other industrialized countries. By the 1920s the United States played a major role in world commerce by exporting and importing large amounts of goods and investing money in foreign businesses. A prolonged downturn in American production, spending, and investing combined with the banking crisis had international consequences. Europe, in particular, suffered financially as it struggled to recover from the devastation of World War I.

The New Deal

When the Great Depression first began, the laissez-faire attitude still dominated political opinion. Some economists, including Andrew Mellon (1855–1937), who served as Secretary of the Treasury from 1921 through 1932, advised President Hoover not to interfere. These economists took the traditional viewpoint that supply and demand factors would eventually equilibrate, and the economy would recover on its own. Hoover was not convinced. He tried a variety of tax adjustments, asked industry not to cut wages, and pushed for public works projects. But the depression only deepened.

By 1932 Americans were ready for a change in leadership. New York State Governor Franklin D. Roosevelt (FDR) promised "a new deal" for the nation. He was elected in a landslide and developed a government that aggressively acted in economic affairs. The New Deal included a wide variety of programs intended to bring relief to suffering Americans, revive farming and business, and reform the stock market and banking industry. After more than seventy years, economists still argue about whether the New Deal was actually good for the nation. They all agree, however, that it was a turning point in American economic history.

Some New Deal programs did not survive court challenges. The National Industrial Recovery Act of 1933 encouraged companies within industries to form alliances and set prices and wages. The companies that participated were exempt from antitrust laws that ordinarily would have forbidden such collusion. In 1935 the U.S. Supreme Court ruled the law unconstitutional. The Agricultural Adjustment Act (AAA) of 1933 paid farmers to reduce production. It was thought that lower supply would raise prices and improve the living conditions of farmers. In 1936 the U.S. Supreme Court invalidated parts of the AAA. But the payment of farm subsidies became a permanent component of U.S. economic policy.

Other legacies of the New Deal include:

  • Federal Securities Act (1933)—Regulated the selling of investment instruments (such as stock) to ensure that buyers are better educated about their purchases and to prevent fraudulent practices
  • Securities Exchange Act (1934)—Regulated the stock exchanges and created the U.S. Securities and Exchange Commission
  • Glass-Steagall Banking Act (1933)—Separated the commercial and investment banking industries and established the Federal Deposit Insurance Corporation (FDIC) to safeguard depositors' money (1935)—Guaranteed the right of employees in most private industries to organize, form labor unions, and bargain collectively with their employers established the National Labor Relations Board (1935)—Established a program to provide federal benefits to the elderly and assist the states in providing for "aged persons, blind persons, dependent and crippled children, maternal and child welfare, public health, and the administration of unemployment compensation laws"

Government employment programs under the Public Works Administration, Works Project Administration, and Civilian Conservation Corps put people to work building roads, dams, bridges, airfields, and post offices and developing national parks for tourism. According to economics writer Robert Samuelson, as many as ten to twelve million Americans were employed in these programs at various times during the 1930s ("Great Depression," http://www.econlib.org/library/Enc/GreatDepression.html#biography).

Perhaps the greatest legacy of FDR's New Deal was the new role of the federal government as a manipulator of economic forces and a provider of benefits to the needy. This change in American policy was seen as a wise and compassionate move by some people and as a dangerous shift toward socialism by others. In American history the New Deal is considered the birth of "big government."

By 1940 the unemployment rate was 14.9%. (See Figure 1.5.) Although down from a peak of 25% in 1933, the rate was still very high by historical standards. Nearly a decade of New Deal programs had softened the hardship suffered by many Americans, but had not boosted the country out of the Great Depression. It was going to take a war to accomplish that task.

World War II

During the 1930s Germany, led by the dictator Adolf Hitler (1889–1945), began aggressive military campaigns against its neighboring countries, followed by similar moves by Japan and Italy. Many in the United States were determined to keep the nation out of these international conflicts, but in 1939 Britain, France, and Canada declared war on Germany after Germany invaded Poland. The Germans began a devastating bombing campaign of London called a blitzkrieg ("lightning war"). By 1941 Germany and its Italian and Japanese allies had occupied France and war had spread throughout Europe, North Africa, parts of China, and the North Atlantic and South Pacific seas.

In the United States, FDR publicly adhered to the isolationist sentiment of the American public but as early as 1939 he began quietly expanding the nation's military capabilities. On December 29, 1940, he gave a radio address in which he reiterated his goal of keeping the United States out of the war, but he warned that the very survival of the United States would be jeopardized if Great Britain were to be defeated. He pledged to provide America's allies with "implements of war," saying "we must be the great arsenal of democracy." FDR believed that American industrial power would save Great Britain and its allies from defeat. In his address FDR noted:

Manufacturers of watches, farm implements, linotypes, cash registers, automobiles, sewing machines, lawn mowers, and locomotives are now making fuses, bomb packing crates, telescope mounts, shells, pistols, and tanks. But all our present efforts are not enough. We must have more ships, more guns, more planes, more of everything. This can only be accomplished if we discard the notion of business as usual.

On December 7, 1941, Japanese forces attacked Pearl Harbor in Oahu, Hawaii, where members of the U.S. Navy, Army Air Corps, and Marines were stationed. The attack killed more than twenty-four hundred American service people and civilians. Within days, the United States was at war with Japan, Germany, and Italy. "Business as usual" was a thing of the past.

Although the U.S. officially entered World War II in 1941, it had been gearing up its industries for war for more than a year. This experience at mobilization (converting civilian industries to produce military goods) proved to be invaluable. The federal government established a host of agencies to oversee wartime production, labor relations, and prices. Efforts were made to avoid the huge inflation increase that had occurred during World War I. Rationing was instituted on some goods to prevent dramatic price increases. By and large, these efforts were successful. Figure 1.6 shows the annual rates of inflation experienced in the United States between 1940 and 1950. Inflation spiked during the early years of the war and immediately after but was not consistently high over the decade.

Businesses rushed to increase production and hire workers to produce the goods needed for the war effort. Unemployment dropped dramatically and wages went up, particularly for workers in low-skilled factory jobs. Laborers found themselves in high demand and joined labor unions in record numbers to consolidate their power and seek better working conditions.

World War II was an expensive endeavor for the United States. But it was believed that the stakes were so high that the war had to be won at any cost. As shown in Figure 1.7, government spending during the war far outpaced revenues. By 1945 the government was spending around $90 billion per year and taking in revenues around half that amount. Once again, the difference was made up by borrowing.

The flood of American goods and military might turned the tide of the war. By early 1945 Germany and Italy had been defeated. In August of that year Japan surrendered after suffering two devastating hits by U.S. atomic bombs. World War II was over, and a new world order had been established. The United States abandoned its isolationist stance and assumed an active role in international affairs.

Keynesian Economics

The Great Depression shook many peoples' beliefs in the laissez-faire approach to economics advocated by Adam Smith in the eighteenth century. During the 1930s and 1940s different approaches to capitalism began to receive serious attention. One of the most famous economists of the time was John Maynard Keynes (1883–1946). Keynes (pronounced "canes") was an English expert in the application of economic theory to real-world problems. He published several influential books, including The Economic Consequences of the Peace (1919) and the General Theory of Employment, Interest and Money (1936). In the latter book Keynes advocated strong government intervention in the economy as a remedy for the ongoing economic depression.

Politicians of the 1930s were not completely convinced by Keynes's arguments, particularly in regards to government spending. Maintaining a balanced federal budget was considered so sacred that the governments of Hoover and Roosevelt were reluctant to veer far from that precedent. But following World War II it appeared obvious that huge government spending had helped fuel recovery from the Great Depression. Keynes's theories on capitalism, unemployment, and business cycles became highly regarded, and he is credited with inventing macroeconomics. This is a "big picture" approach that measures broad trends in an economy, such as employment and inflation, and the way these trends interact. In contrast, microeconomics analyzes the economy on a smaller scale—for example, by studying the supply and demand factors at work in individual markets or industrial segments.

Keynesian economics became the operating principle of the U.S. government in the post-World War II era. Although Keynes had his critics, and his methods have been revised over time, he is considered by many to be the father of the mixed economy system used in the United States to this day.

The National Income and Product Accounts

One innovation of the 1940s was the National Income and Product Accounts (NIPAs), which are compilations of national economic data. Prior to that time there was a lack of comprehensive macroeconomic data on the nation's inputs and outputs, such as labor and production of goods and services. This problem became apparent during the Great Depression when the Hoover and FDR administrations were forced to make decisions based on fragmented and incomplete data on the nation's financial condition. As a result, the federal government asked researchers at the National Bureau of Economic Research (NBER) at the City University of New York to begin estimating national income (wages, profits, rent, etc.). The NBER had been founded in 1920 as a private nonprofit organization dedicated to economic research.

During World War II the federal government began compiling another macroeconomic measure called the gross national product (GNP). The GNP is the amount in dollars of the value of final goods and services produced by Americans over a particular time period. For example, the GNP for 1945 was nearly $212 billion (Historical Statistics of the United States, September 1975). GNP is calculated by summing consumer and government spending, business and residential investments, and the net value of U.S. exports (exports minus imports).

At first GNP estimates were made annually eventually they were calculated on a quarterly basis. The GNP provides a valuable tool for tracking national productivity over time. By the end of the 1940s an entire set of NIPAs had been developed to report macroeconomic data on the state of the U.S. economy.

A Postwar Spending Spree

Following World War II many U.S. industries demobilized from producing military goods and returned to producing consumer goods. Well-paid workers who had been frustrated by wartime shortages were ready to spend money. Returning soldiers received government incentives to buy houses and start businesses. Postwar euphoria drove a spending spree and a baby boom. The birth rate increased from an average of 19.2 births per one thousand population in the 1930s to 24.8 births per one thousand population in the 1950s. (See Figure 1.8.)

Growing families purchased bigger houses, many of which were built in the suburbs. The suburban population shift was accompanied by a growth in shopping centers, supermarkets, and car ownership. According to the U.S. State Department's Outline of U.S. History, annual production of automobiles quadrupled between 1946 and 1955. Television and air conditioning became widely available following World War II. Air conditioning spurred migration from the Northeast and Midwest to the Southeast and Southwest. By the end of the 1950s three-fourths of all American families owned at least one television set. Television advertising reached a large audience and promoted more consumer spending.

New industries in aviation and electronics arose after World War II. Many existing industries underwent consolidation and growth as corporations merged into giant conglomerates. Figure 1.9 shows the national income produced by the business sector for 1953 to 1957. Manufacturing accounted for nearly a third of the national income during this period.

The 1950s also experienced a boom in business franchises. In this arrangement an individual could purchase permission from a company in one geographic area to sell the company's products or services in another area. Franchising proved to be a very effective means of spreading brand recognition and was widely practiced in the surging "fast food" industry. In 1955 Des Plaines, Illinois, became the site of the first McDonald's franchise after businessman Raymond Kroc became a franchisee for the McDonald brothers, who owned a small chain of restaurants in California. By 1959 there were more than one hundred McDonald's franchises around the country. Over the next decade franchising was practiced in a number of other businesses, many of which grew into major corporations.

Dwight D. Eisenhower was president from 1953 through 1961. His administration is associated with a growing economy that experienced low inflation rates and general prosperity. But the prosperity of the 1950s was not shared equally in American society. Once again, farmers found themselves in trouble due to overproduction. Oversupply of agricultural goods meant lower prices (and lower profits). Agriculture became increasingly an industry in which large "factory farms" run by corporations were able to survive, while many smaller farmers could not compete.

Minority populations (largely African-American) also suffered financial hardship during this era. Figure 1.10 shows the dramatic difference between the unemployment rates for whites and minorities during the postwar decades. By the mid-1950s unemployment among minorities was twice as high as it was among white workers, a disparity that lingered well into the 1960s. It was in this atmosphere that the civil rights movement gained in strength and urgency. In 1954 segregation was ruled unconstitutional by the U.S. Supreme Court. A year later African-American seamstress and activist Rosa Parks was arrested in Alabama for refusing to move from the "white" section of a public bus. This incident spurred a bus boycott and ultimately brought Martin Luther King, Jr., and other leaders of the movement to national prominence.

The Cold War, Korea, and Vietnam

The United States left World War II in sound economic shape. All other industrialized nations had suffered great losses during the war in their infrastructure, financial stability, and populations. The United States invested heavily in the postwar economies of Western Europe and Japan, hoping to instill an atmosphere conducive to peace and the spread of capitalism. U.S. barriers to foreign trade were relaxed to build new markets for American exports and to allow some war-ravaged nations to make money selling goods to American consumers.

The Soviet Union had been a wartime ally of the United States, but relations became strained after World War II ended. The Soviet Union had adopted communism following a period of revolution and civil war in the late 1910s and early 1920s. During World War II the Soviet Union "liberated" a large part of Eastern Europe from Nazi occupation. Through various means the Union of Soviet Socialist Republics (USSR) assumed political control over these nations. The USSR had been largely industrialized prior to World War II and quickly regained its industrial capabilities. It soon took a major role in international affairs, placing it in direct conflict with the only other "superpower" of the time—the United States. A "cold war" began between two rich and powerful nations that had completely different political, economic, and social goals for the world.

The cold war was fought mostly by politicians and diplomats. A direct and large-scale military conflict between U.S. and Soviet forces never occurred. But an expensive arms race began in which both sides produced and stockpiled large amounts of weapons as a show of force to deter a first strike by the enemy. In addition, both sides provided financial and military support to countries around the world in an attempt to influence the political leanings of those populations. Communist China joined the cold war during the 1950s and often partnered with the USSR against U.S. interests.

In 1950 North Korean forces backed by the Soviet military invaded South Korea, setting off the Korean War (1950–53). The United States was caught off guard by the invasion, but rushed to defend South Korea from a communist takeover. Over the next three years U.S. and allied forces under the United Nations fought against North Korean and Chinese troops supported by the Soviet Union. The war ended in a stalemate with both sides back where they had started—on either side of the thirty-eighth parallel (a line of latitude). In 1953 a cease-fire agreement ended the armed conflict in Korea. North Korea remained under communist control, while South Korea became a democracy protected by United Nations troops (primarily U.S. forces).

Also during the 1950s, the U.S. military became involved in a conflict between communist North Vietnam and noncommunist South Vietnam. The United States sent thousands of "military advisors" to South Vietnam during the late 1950s and early 1960s in an effort to bolster the defenses of the country. In 1964 the conflict escalated into full-scale civil war. Once again, the U.S. found itself in a remote Asian country trying to prevent the spread of communism.

The fight in Vietnam turned out to be a long and difficult one in which U.S. forces, assisted by a handful of other countries, were pitted against highly motivated forces equipped and backed by the USSR and China. The U.S. was engaged in the Vietnam War for more than a decade before withdrawing its last troops in 1975 and leaving South Vietnam to a communist takeover. According to Outline of U.S. History, the total cost of the Vietnam war exceeded $150 billion.

In both the Korean and Vietnam wars the U.S. chose to fight in a limited manner without using its arsenal of nuclear weapons or engaging Chinese or Soviet troops directly for fear of sparking another world war. Full-scale mobilization of U.S. industries was not required for these wars, as it had been during World War II. Instead, a defense industry developed during the cold war to supply the U.S. military on a continuous basis with the arms and goods it wanted. In a 1961 speech, outgoing President Dwight D. Eisenhower described this arrangement to the American public:

We can no longer risk emergency improvisation of national defense we have been compelled to create a permanent armaments industry of vast proportions. Added to this, three and a half million men and women are directly engaged in the defense establishment. We annually spend on military security more than the net income of all United States corporations.

Figure 1.11 shows the percentage of the national budget that was devoted to national defense between 1940 and 1970. Spending on national defense soared during World War II and then declined dramatically following the war's end. But military spending quickly climbed again as the cold war heated up, remaining above 40% for nearly two decades.

The Birth of the Modern Fed

The nation's central bank—the Federal Reserve System—was formed in 1913 to furnish currency and supervise financial institutions. Gradually it took on other roles that affected the amount of money circulating in the United States and the interest rates charged by banks to their customers. The Federal Reserve System comprises twelve regional banks located around the country and overseen by a seven-member board of governors headquartered in Washington, D.C.

The Fed, as it came to be called, was designed to be as independent as possible from political pressures from the U.S. president and the Congress. This safeguard was included to prevent the Fed from having to bow to demands for short-term economic fixes requested by politicians seeking reelection. The Fed was charged with taking a big-picture, long-term approach to economic policy for the good of the nation as a whole.

From its inception until the early 1950s the Fed was influenced by the policies of the U.S. Department of the Treasury, a federal agency created in 1789. During the late 1940s Fed and Treasury officials disagreed about how best to handle the large debt accumulated by the United States during World War II. This conflict and other contentious issues led to a new agreement, or accord, between the two agencies about the roles of each in the U.S. economy. This accord is considered the birth of the modern Fed, an organization that has grown to exert great power in the U.S. economy (Robert L. Hetzel and Ralph F. Leach, "After the Accord: Reminiscences on the Birth of the Modern Fed," Economic Quarterly, volume 87/1, winter 2001, http://www.richmondfed.org/publications/economic_research/economic_quarterly/pdfs/winter2001/leach.pdf).

The chairman of the board of governors at the time of the accord was William McChesney Martin, Jr. (1906–98). Martin was a dynamic leader who maintained his post for nearly two decades. Under his leadership the Fed assumed greater control over the nation's financial policies. This control was exercised primarily by influencing interest rates on loans. Lowering interest rates encouraged borrowing, which put more money into circulation for spending or investing. However, if demand outpaced supply, price inflation became a problem. Then, the Fed would raise interest rates to make borrowing less attractive and dampen demand. Martin reportedly summed this up as follows: "You have to take away the punch bowl when the party is warming up." His policy proved to be fruitful during the prosperous decades of the 1950s and 1960s.

The 1960s—Social Upheaval and Economic Growth

The 1960s were a time of social and economic change for the United States. The decade began with the election of President John F. Kennedy, who promised to ensure economic growth and address America's growing social problems. In 1963 Kennedy's efforts were cut short by his assassination. Lyndon B. Johnson took over as president and dramatically enlarged the federal government and its role in socioeconomic affairs. Johnson's administration initiated large-scale programs for the needy, including the health care programs Medicare (for the elderly) and Medicaid (for the poor), jobs programs, federal aid to schools, and food stamps for low-income Americans. The so-called "war on poverty" and the escalating war in Vietnam proved to be very expensive. At the same time, the United States was pursuing a costly (but ultimately successful) endeavor to land astronauts on the moon before the end of the decade.

Consumer and government spending drove the nation's GNP during the 1960s. It grew to $977 billion by 1970. But inflation became a problem (as it often does in a fast-growing economy) in the late 1960s. At the macroeconomic level there was too much money in the hands of consumers, which resulted in consumer demand that was higher than supply. By 1970 the inflation rate had reached 5.7%.

The nation was preoccupied with the explosive social problems of the time. During the mid- to late 1960s the country was plagued by protests against the Vietnam War and riots in blighted urban areas populated by poor African-Americans. By 1968 there were half a million American troops in Vietnam. Nightly television coverage provided a bleak picture of the war's progress and helped turn public opinion against the war and President Johnson. In 1968 Johnson announced he would not seek reelection. That same year Martin Luther King, Jr., and Robert Kennedy—John Kennedy's brother and an aspiring presidential candidate—were assassinated.

The United States left the 1960s having experienced the longest continuous stretch of positive GNP growth in history—the first quarter of 1961 through the last quarter of 1969 (National Bureau of Economic Research, http://www.nber.org/cycles.html/). But high inflation was about to become a major problem.

The 1970s: Stagflation and Energy Crises

Stagflation is a word coined during the 1970s to describe an economy suffering stagnation, high inflation, and high unemployment all at the same time. This combination of economic problems was unprecedented in U.S. history. Previously, high inflation had occurred when the economy was growing quickly, such as during World War II. But high production had meant high employment levels. By contrast, economic downturns were associated with higher unemployment but lower inflation (and even deflation). These relationships had been considered natural and certain.

The 1970s were unique, because both unemployment and inflation were high, by historical standards. Economist Robert Barro invented a new term called the Misery Index to describe this condition. The Misery Index is computed by summing the unemployment rate and inflation rate. Figure 1.12 shows the annual Misery Index calculated for 1968 through 1983. By the mid-1970s each rate exceeded 5%.

There were three presidents during the 1970s—Richard Nixon, Gerald Ford, and Jimmy Carter. Each tried a variety of measures to stem stagflation, but none was considered effective. Nixon implemented wage and price controls and increased government spending. In 1973 he resigned under threat of impeachment for his role in the Watergate scandal. Vice President Gerald Ford assumed the presidency. Economic problems continued, and in 1976 the country elected Jimmy Carter as the new president. Carter had emphasized the high Misery Index during his presidential campaign, but his administration was unable to turn the tide. By 1980 the Misery Index had climbed to 20%.

FOREIGN OIL AND COMPETITION

America's economic problems were aggravated by its dependence on foreign oil and competition from foreign industries. In 1973 Middle Eastern members of the Organization of Petroleum Exporting Countries (OPEC) halted oil exports to the United States in retaliation for U.S. support of Israel. The oil embargo lasted five months. When shipments resumed, the price of oil had dramatically increased. Americans faced high prices, long lines, and shortages at the gas pumps. Figure 1.13 shows that the average retail price of gasoline surged from around thirty-five cents per gallon in 1972 to $1.35 per gallon in 1981. A fifty-five mile per hour speed limit was imposed on the nation's interstates to save fuel. The federal government called on Americans to conserve energy and provided an example by not lighting the White House Christmas tree. During the late 1970s a revolution in oil-rich Iran brought a second wave of shortages to U.S. energy supplies.

The "energy crisis" of the 1970s had a ripple effect through the U.S. economy, causing the prices of other goods and services to increase. Lower profits and uncertainty about the future caused businesses to slow down and reduce their workforces. At the same time, American industries in steel, automobiles, and electronics endured stiff foreign competition, particularly from Japan. Small energy-efficient Japanese cars became very popular in the United States. By 1980 gasoline cost more than $1.00 per gallon, which was quadruple the price in 1970. American car makers struggled to compete, having always relied on consumer demand for large automobiles—now considered "gas-guzzlers."

DEREGULATION

One of the measures that President Carter took to combat stagflation was deregulation. For decades certain industries in the United States had been given government immunity from market supply and demand factors. The railroad, trucking, and airline industries were prime examples. Companies in these industries were guaranteed rates and routes and were allowed to operate contrary to antitrust laws. In 1978 the airline industry was deregulated airlines began to compete with each other over fares and routes, and new companies entered the industry. Some of the large, well-established companies were unable to compete in the new environment and went out of business. But demand increased as prices came down and flying became available to many more Americans. By 1980 deregulation had been completed or was underway for the railroad, trucking, energy, financial services, and telecommunications industries.

The 1980s—Recession and Reaganomics

In November 1980 the American people elected Ronald Reagan as the new president. Inflation was at 13% that year—incredibly high for a peacetime economy. Unemployment was at 7%, meaning that millions of people were unemployed and faced with rapidly increasing prices in the marketplace. The economic situation was dire, and drastic measures would be required to turn the economy around.

SLAYING THE INFLATIONARY DRAGON

In late 1979 President Carter had appointed a new governor of the Federal Reserve, Paul Volcker, who promised to "slay the inflationary dragon." Volcker began by tightening the nation's money supply. This had the effect of making credit more difficult to obtain, which drove up interest rates. The government knew that rising interest rates would probably trigger a production slowdown (a recession) that would push unemployment even higher. It was a trade-off that policymakers during the previous decade had been unwilling to accept.

Volcker forged ahead with his policies, and by the early 1980s interest rates had reached historical highs. Figure 1.14 shows that the prime loan rate—the interest rate that banks charge their best customers—peaked at 21.5% in December 1980. In 1981 the average interest rate for a conventional thirty-year mortgage soared to 18.45%, the highest rate ever recorded by the Federal Home Loan Mortgage Corporation (http://research.stlouisfed.org/fred2/data/MORTG.txt).

Lack of credit caused a business slowdown—a reduction in GNP growth (or recession). As expected, the recession put more people out of work. Unemployment climbed at first, averaging 10% in 1982 and 1983, but then began to decline. By the end of the decade it was down around 5%. The inflation rate dropped from a high of 13% in 1980 to less than 5% by 1989. Although the spike in unemployment had been painful for Americans, the inflationary dragon was finally dead.

REAGANOMICS

When Reagan took office in 1981 he brought a new approach to curing the nation's financial woes: supply-side economics. Traditionally, the government had focused on the demand side—the role of consumers in stimulating businesses to produce more. Reagan preferred economic policies that directly helped producers. Professor Paul Johnson of Auburn University describes the philosophy this way: "Supply-side policy analysts focus on barriers to higher productivity—identifying ways in which the government can promote faster economic growth over the long haul by removing impediments to the supply of, and efficient use of, the factors of production" (http://www.auburn.edu/∼johnspm/gloss/supply_side).

One of the cornerstones of supply-side economics is reducing taxes so that people and businesses have more money to invest in private enterprise. Reagan enacted tax cuts through two pieces of legislation: the Economic Recovery Tax Act of 1981 and the Tax Reform Act of 1986. The result was a much lower number of tax brackets (the various rates at which individuals are taxed based on their income), a broader tax base (wealth within a jurisdiction that is liable to taxation), and reduced tax rates on income and capital gains (the profit made from selling an investment, such as land).

At the same time, Reagan pushed for greater national defense spending as part of his "peace through strength" approach to the Soviet Union and selective cuts in social services spending. But no cuts were made to the largest and most expensive programs within the social services budget. The combination of all these factors resulted in high federal deficits during the 1980s. In other words, the federal government was spending more than it was making each year. As shown in Figure 1.15, the federal deficits of the mid-1980s were more than twice what they had been during the mid-1970s. In 1981 the national debt (the sum of all accumulated federal deficits since the nation began) reached $1 trillion.

The 1990s—Sparkling Economic Performance

The 1990s were a time of phenomenal economic growth for the United States, even amid the shadows of war and an ever-increasing federal deficit. In August 1990 the military forces of Iraq under President Saddam Hussein invaded the small neighboring country of Kuwait. President George H. W. Bush had taken office in 1989 and quickly acted to put together a coalition of international forces that successfully forced Iraq out of Kuwait. The Gulf War, as it came to be known, was short-lived and would be seen as a triumphant, if incomplete, victory by allied forces. Although his military strength was weakened, Hussein was not removed from power in Iraq and continued to pose foreign relations problems for the United States for many years.

President Bush had been elected in large part because of his promise not to raise taxes. During the campaign he famously said, "Read my lips: No new taxes." But the promise was not one he could keep given the economic realities of the time. During the late 1980s there had been a severe financial crisis in the savings and loan industry, which had been recently deregulated. A series of unwise loans and poor business decisions left most of the industry in shambles and necessitated a government bailout. According to the U.S. Department of State, by 1993 the cost of the bailout had exceeded $500 billion ("Outline of U.S. History," November 2005, http://usinfo.state.gov/products/pubs/histryotln/order.htm). At the same time, the government faced rapidly rising expenditures on health care programs for the elderly (Medicare) and the needy (Medicaid). Bush reluctantly agreed to a tax increase, a move that was politically damaging. In 1992 he lost his reelection bid to Arkansas Governor Bill Clinton, who was reelected in 1996.

By and large the 1990s were a period of peace and prosperity for America. The cold war ended when the Soviet Union disintegrated into individual republics. Technological innovations, particularly in the computer industry, helped push the economy to new heights. Sterling business success led to robust investor confidence in the stock markets. Figure 1.16 shows the portion of household assets invested in real estate and corporate equity (stocks) between 1945 and 1998. Although real estate was the preferred investment through nearly all of this period, the 1990s witnessed tremendous increases in the holdings of corporate equity by the average American. In the mid-1980s the average household had only 10% of its assets in corporate equity. By 1998 this percentage had reached nearly 30%, roughly equal to the percent held in real estate. The Dow Jones Industrial Average is a stock market index—a measure used by economists to gauge the value (and performance) of the stock of thirty large companies. Between the late 1970s and the late 1990s the index soared from around one thousand points to eleven thousand points—reflecting the tremendous value gained by these companies over that time period.

The combination of low interest rates, low unemployment, and high investment rates and business growth combined to greatly expand the U.S. economy. In a 1999 speech, Chairman of the Federal Reserve Board Alan Greenspan described the expansion as "America's sparkling economic performance."

The 2000s—Hardship, War, Peace, and Prosperity

In January 2001 George W. Bush was inaugurated as the nation's new president. He entered office with plans to overhaul many federal programs and enacted a tax cut within the first few months of his administration. On September 11, 2001, four commercial airliners were commandeered by hijackers. Two of the planes were flown into the twin towers of the World Trade Center in New York City. A third plane was flown into the Pentagon in Washington, D.C. The fourth plane crashed in a field in Pennsylvania after passengers likely struggled with their hijackers. The attacks killed more than twenty-nine hundred people and stunned the world. Intelligence revealed that the hijackers were Middle Eastern terrorists associated with the group al-Qaida, led by Osama bin Laden. The U.S. believed that bin Laden was being harbored by the Taliban government of Afghanistan and demanded that he be turned over to authorities. After the Taliban refused to do so, the United States military invaded Afghanistan. Although the military operations were technically a success, the U.S. was not able to capture bin Laden and found itself in a lingering guerilla-type conflict with Taliban and al-Qaida fighters.

The so-called 9/11 attacks dramatically altered the priorities of the U.S. government. The president called for a worldwide war against terrorism and created a new Department of Homeland Security to strengthen national security. In 2003 an allied military force comprised mostly of American and British troops invaded Iraq. The allied forces met little resistance from Iraqi forces, and the war was declared over in less than a month. But, as in Afghanistan, the United States found itself trying to establish order in a country in which pockets of insurgents (well-armed and determined guerillas and terrorists) managed to wreak havoc and kill American soldiers and innocent civilians. As of the fall of 2006 the U.S. military continued its presence in Afghanistan and Iraq. Both nations were trying to rebuild with U.S. assistance. Fox News reported in September 2005 that the Afghanistan and Iraq campaigns had cost the United States more than $300 billion at that time (September 10, 2005, http://www.foxnews.com/story/0,2933,169035,00.html).

The 9/11 attacks had numerous direct effects on the U.S. economy. Investor nervousness brought a short-lived dip in the stock markets. The tourism industry suffered a major setback, and insurance companies had to make massive payouts to settle claims. There were also costs to the government for rescue and recovery operations. Longer-term effects include the financial repercussions of new national security and antiterrorism measures implemented at home and abroad.

THE INTERNET BUBBLE BURSTS

During the late 1990s the stock market witnessed tremendous growth, driven in large part by investor enthusiasm for Internet-related businesses. Access to the Internet became widespread in America and much of the developed world, creating many new market opportunities for entrepreneurs. Investors enthusiastically poured money into the stock of these new businesses. NASDAQ is U.S.-based stock market on which the stock of many technology companies is traded. The NASDAQ composite index is a measure of the performance of many of the stocks on NASDAQ. In 1990 the index was less than five hundred. In early 2000 it peaked above four thousand during the height of the Internet stock craze. Many of the stocks had become overvalued their high prices could not be sustained based on the actual financial results that the companies were producing. What followed was a sharp market correction, as investors sold off many Internet-based stocks and the prices plummeted. By late 2002 the NASDAQ composite index was around twelve hundred, from which it slowly began to climb again.

In economics a "bubble" is a phenomenon in which investors overzealously invest (speculate) in a particular commodity or market sector that becomes overvalued. Excitement about possible gains overrules frank analysis of the underlying financial factors. Unfortunately, the very existence of a bubble is not evident until after the fact, when the bubble has burst and much value has been lost in the investments and the businesses involved.


Types of GDP

The Bureau of Economic Analysis compiles the data. Keep in mind, when reviewing this history, that the BEA measures GDP in two ways: nominal GDP and real GDP.

Nominal GDP

Nominal GDP is the total U.S. economic output for that year. The BEA also calls it the "current-dollar GDP" since it's measured as a dollar amount and it doesn't take factors like inflation into account.   Experts use nominal GDP to compare economic output to U.S. debt, which is also measured in dollars without adjusting for inflation. The article "National Debt by Year" shows the debt-to-GDP ratio since 1929.

Real GDP

Real GDP accounts for inflation, making comparisons to previous years more accurate.   The BEA uses it to calculate the GDP growth rate and GDP per capita. Real GDP is important because without canceling out the effects of inflation, the GDP could appear to grow, when really all that's happened is an increase in prices.

To calculate real GDP, the BEA starts with a reference year. The current base year is 2012.   You'll notice that nominal and real GDP are the same in 2012. Real GDP shows what GDP would have been in each year if it were priced in 2012 dollars. That's how it removes the effect of inflation.

The current base year for GDP calculations is 2012. The period from which the weights for a measurement series are derived. The national income and product accounts (NIPAs) currently use the year 2000 as the base period. Rebasing changes the reference year (or base year) for the real (chained dollar and quantity index) estimates and price indexes and expresses GDP and other NIPA aggregates in terms of the prices of one year. The effect of rebasing is to produce chained-dollar estimates that are closer to additive for periods near the new base year. It is important to note that percentage changes based upon chain-type indexes are not affected by rebasing.

Generally, the year selected as the reference year is the latest year that will not be revised until the next comprehensive update. For the 2018 comprehensive update, real estimates were rebased from chained (2005) dollars to chained (2012) dollars.


The ‘50s and ‘60s: Decades of Prosperity and Protest (DBQ)

Historians tend to portray the 1950s as a decade of prosperity, conformity, and consensus, and the 1960s as a decade of turbulence, protest, and disillusionment. These stereotypes are largely true, though, as with everything in life, there are exceptions to this perspective. Therefore, the historians&rsquo portrayal of the 1950s and 1960s is accurate for the majority of Americans, though some groups were clearly exceptions.

The 1950s were characterized as a prosperous and conformist decade for many reasons. The first and most widespread of these reasons was the development of the suburbs. As masses of Southern blacks migrated northward to the big cities, more rich and middle-class families left to live in the suburbs to escape the crime, redlining, and blockbusting of the cities. This mass migration later became known as the &ldquowhite flight&rdquo (Document A). The white families that moved into the suburbs were the perfect picture of conformity&mdashliving in row upon row of identical &ldquoLevittown&rdquo houses, with little individuality or distinction. Furthermore, American families of the time often took the form of the &ldquonuclear family&rdquo with two parents, two children, and often a pet like a dog or cat. This new &ldquomiddle class&rdquo earned between $3,000 and $10,000 a year and included 60 percent of the American people by the mid-1950s. Fortune magazine described Americans as &ldquoa great mass&hellipbuy[ing] the same things&mdashthe same staples, the same appliances, the same cars, the same furniture, and much the same recreation&rdquo (Document C). The new &ldquomass market&rdquo that developed in 1950s society was caused by two central reasons.

The first reason that this &ldquomass market&rdquo developed was the spread of television. Television had helped to create a &ldquopopular culture&rdquo that millions of Americans tuned into regularly. By the end of 1950, ninety percent of Americans owned a television, and nearly all owned a radio. Television and radio acted as tools for marketers to dictate the values of American society in order help sell their products. By the mid-1950s marketers spent $10 billion annually to advertise their goods or services on television. Television caused Americans to adopt an image of the &ldquoideal&rdquo Americans in doing so many Americans began to succumb to societal demands. Notably, suburban shopping malls began to replace downtown shops during the 1950s. Middle class white Americans became more sheltered in their sheltered suburban neighborhoods and did not see the poor blacks living in the cities. Isolated from others, many middle class Americans found no reason to dissent and sought to merely enjoy the prosperity of the decade with mind-numbing conformity.

The second cause of the development of the new &ldquomass market&rdquo in 1950s society was the escalation of the Cold War. The Cold War had isolated and demonized Soviets in American society. The political witch-hunt which took place under the lead of Senator McCarthy jailed hundreds of suspected Communist &ldquoenemies&rdquo for merely exercising their First Amendment rights to freedom of speech and freedom of the press. Americans became afraid of doing anything that might make them the targets of Federal investigation by organizations like the House of Un-American Activities Committee (HUAC). Newspaper editors and book authors grew afraid of publishing articles critical of the government in fear that they may might be accused of being Communist sympathizers and put in jail. A famous political cartoon from the 1950s shows Senator McCarthy extinguishing the Torch of Liberty (Document B). The fear of foreign ideas and values created by the McCarthyism scare caused a resurgence in American Conservatism during the 1950s. The government encouraged conformity and political consensus followed.

However, not all enjoyed the political and social prosperity of the 1950s. Two thirds of Black American citizens still lived in the South where they continued to suffer the harsh realities of life in a segregated society. Harsh Jim Crow laws continued to govern all aspects of their existence and keep them economically inferior and politically powerless. However, conditions were improved with the landmark decision Brown v. Board of Education of Topeka, Kansas in 1954 which ruled that segregation in the public schools as &ldquoinherently unequal&rdquo and thus unconstitutional. This decision was largely accepted throughout the North and even in the Border States, but states in the Deep South organized &ldquomassive resistance&rdquo to the decision. Southern Senators and Congressmen signed the &ldquoDeclaration of Constitutional Principles&rdquo which pledged unyielding resistance to desegregation. Conflict arose when the governor of Arkansas, Orval Faubus, mobilized the National Guard to prevent nine Black girls from enrolling in a Little Rock High School. Faced with a direct challenge to Federal authority, President Eisenhower was forced to send troops to escort the children to their classes (Document E). It is clear that while the social and political conditions may have been ideal for the majority of middle-class Americans, conflicts and tensions were ever-present for the underprivileged American.

The &lsquo60s were different from the &lsquo50s in many important ways. The worsening conditions in the cities, feminism, and the Vietnam War caused the social and political atmosphere to become turbulent and violent. Protests and war riots become commonplace influential leaders like Malcolm X encouraged bloody protest and women become increasingly discontent with their futile existences as homemakers. The political and social grievances, it seemed, had caused Americans to adopt a &ldquocounter culture&rdquo that encouraged a negative view of authority during the 1960s.

The &lsquo60s saw even worse conditions in the cities than the previous decade. As whites continued to leave the cities and move to suburbs the poor city conditions only worsened. With less revenue in taxes, cities fell into disrepair, crime and drug use increased, and cities become &ldquoblack, brown, and broke.&rdquo Blacks began to realize that the pacifist philosophy encouraged by leaders like Martin Luther King, Jr. was leading nowhere conditions remained the same. Radical new leaders like Malcolm X encouraged &ldquoBlack Power&rdquo, also known as Black Supremacy. X believed that &ldquorevolution is bloody, revolution is hostile, revolution knows no compromise, revolution overturns and destroys everything that gets in its way&hellipyou don&rsquot do any swinging, you&rsquore too busy swinging&rdquo (Document F). This violent, confrontational approach to dealing with social problems encouraged political upheaval and unrest. Law enforcement did not ease the situation either as demonstrated by the riot in Birmingham, Alabama in 1963 where attack dogs and fire hoses were turned against protestors, many of whom were in their early teens or younger. Even pacifist Martin Luther King, Jr. was arrested and jailed during the ensuing protests. While in jail, he changed philosophies and joined X in advocating civil disobedience against the law. Hundreds of demonstrations took place across the country during the 1960s from the East coast to the West the country was truly coursing with the need to protest and be heard. The biggest and most important protest during the 1960s was the March on Washington where more than a quarter million people participated. Protesters demanded passage of better civil rights legislation, the elimination of racial segregation in public schools, and protection for demonstrators against police brutality. However, there were still other political problems that troubled the country during the &lsquo60s.

The Vietnam War was a large point of contention in the minds of Americans during the 1960s. Unsure of the war&rsquos purpose and disillusioned at the enormous human cost, Americans everywhere decried their opposition to the war. President Lyndon Johnson desperately tried to convince the nation that the Vietnam War would &ldquorestore world order&rdquo and &ldquodefend its [Vietnam&rsquos] independence&rdquo (Document H). However, many Americans believed that the U.S. should leave Vietnam. The controversy over the war continued to boil because American politicians continued to support the war despite widespread American resentment for the war. Eventually, Nixon would respond to Americans&rsquo wishes through &ldquoVietnamization&rdquo of the war. However, there were also social issues that troubled Americans during the stormy sixties.

The fight for women&rsquos rights raged on throughout the &lsquo60s. Women began to feel dissatisfied with the simple lives they currently lived and they wanted change (Document G). Unable to obtain high-paying jobs and equal rights in the workplace, women were living as &ldquosecond-class citizens&rdquo in a country where everybody is supposed to be equal under the law. The struggle for equal political rights was also accompanied by a radical social revolution. The &ldquosexual revolution&rdquo was started when the birth control pill was introduced in the early 1960s. The pill made it easier to avoid pregnancies thus, women could become more sexually &ldquofree.&rdquo Gays and lesbians also joined the &ldquosexual revolution&rdquo by proudly parading in New York City in 1970. The unprecedented openness of the 1960s was yet another catalyst for controversy, turbulence, protest, and disillusionment in the 60s.

It is clear that the 50s and 60s differ from each other the 1950s were more conservative than the 1960s the 1960s were more turbulent and prone to protests than the 1950s. However, there were some clear exceptions to these rules in the 1950s. The important differences between the decades are what make each decade a special chapter in the grand American story.

You just finished The ‘50s and ‘60s: Decades of Prosperity and Protest (DBQ). Nice work!


Outline

Kennedy’s New Frontier Spirit

  • Kennedy was elected and took office on January 20, 1961
    • Was the youngest president ever elected, and the first Catholic
    • young and suave
    • his brother, the 35 year old Robert, was attorny general
      • Robert tried to fix the FBI, which wasn't doing enough to stop organized crime and wasn't helping the civil rights movement very little

      The New Frontier at Home

      • Fragile Democaratic majorities in Congress
        • expanded the House Rules Committee
          • Needed more people, or else the (majority) Conservatives would shoot down all his plans
          • campaigned on the theme of revitalizing the economy
          • drew the line at inflation
            • His administration made steel-company owrkers' wages go up, and assumed that the corporations' prices would stay the same (1962)
            • The companies raised their prices anyways, and Kennedy "yelled at them" (to put it in polite terms)
              • they backed down soon afterwards
              • "the most Republican speech since McKinley"
              • would help stimulate the economy w/ billions of dollars being spent
              • would help American military strategy
              • would increase American scientific prestige

              Rumblings in Europe

              • A few months after settling into the White House JFK met with Khrushchev in June 1961
                • Khrushchev was belligerent and threatened to make a treaty with East Germany cutting off Western access to Berlin
                • But the President would not be bullied by the Soviets
                • The concrete and barbed-wire barrier was designed to plug the heavy population drain from East to West Germany
                • Now prospering due to the Marshall Plan and Common Market
                • In 1962 the Trade Expansion Act cut tariffs up to 50% to all members of the Common Market in order to promote trade
                • Charles de Gaulle was suspicious of American intentions in Europe
                  • Wanted the US out of all European affairs

                  Foreign Flare-ups and “Flexible Response”

                  • World-wide decolonization created problems for US foreign policy
                    • The US was funding the UN which was becoming dominated by the numerous small nations of Africa and Asia
                    • Funded the UN interactions in the Congo
                    • This jungle kingdom could serve as a river for communism to spread in to all of SE Asia
                    • Kennedy's advisors recommended sending in US troops
                      • Realized that he had too little forces while remaining in Western Europe
                      • Imposed a shaky peace on Laos in 1962
                      • Developed an array of military options for all possible crisises
                      • Added $ to military forces as well as Special Forces (Green Berets)

                      Stepping into the Vietnam Quagmire

                      • "Flexible Response" seemed like a good idea, but it had problesm in it
                        • It kind of made it easier to start shooting than to be diplomatic
                        • Allowed more use of force
                          • See Vietnam
                          • America had poured in $ to keep it going and stave off communism, but it was not very sturdy ever since the creation of North and South Vietnam
                          • 1961- Kennedy orders more troops to Vietnam
                          • Diem wouldn't cooperate, so the US encouraged an overthrow (by anyone other than the communists) in 1963
                          • This led to "political desintegration" and the collapse of South Vietnam
                          • Kennedy told the vietnamese it was "their war" and made commitments that made a simple "pullout" almost impossible

                          Cuban Confrontations

                          • Latin America was starting to resent the US
                            • 1961- Kennedy made the Allianec for Progres, which was supposed to be the Marshall Plan for Latin America
                              • Hoped to minimize gap between rich and poor and prevent communism
                              • These exiles would be trained/armed by America, and would start an uprising from the people of Cuba
                              • April 17, 1961- Bay of Pigs
                                • US isn't part of direct intervention, and the old aircrafts of the exiles couldn't fight against Castro's more modern ones
                                • There was no "popular uprising" form the people
                                • The exiles were forced to surrender
                                  • Most went to jail, while some were traded for humanitarian supplies
                                  • Kennedy took full responsibility
                                  • In 1962, it was discovered that Khrushchev was putting nuclear missles in Cuba
                                    • It was assumed that these weapons would be used to blackmail the US into doing what the USSR needed
                                    • October 22, 1962: Made a "naval quarantine" of Cuba
                                    • Ordered that the weapons be removed
                                    • Told Khrushchev that any attack from Cuba would be directly related to USSR, and retaliation would be aimed at Russia
                                    • October 28: Khrushchev took the missiles out of Cuba in exchange for the end of the quarantine and no invasion from the US
                                    • US agreed to remove missiles in Turkey that were aimed at USSR
                                    • Khrushchev was "kicked out" of his Kremlin position
                                    • Russia started huge military expansion
                                      • This led to a game of "catch-up" in America
                                      • 1963: A treaty was signed that prevented trial nuclear explosions
                                      • Encouraged Americans to stop w

                                      The Struggle for Civil Rights

                                      • Kennedy had campaignede with a strong appeal to black voters but proceeded gingerly to redeem his promises
                                      • He had pledged to eliminate racial discrimination in housing "with a stroke of the pen" but it took him almost two years to do so
                                      • Political concerns stayed the president's hand on civil rights. Kennedy needed the support of southern legislation to pass his economic and social legislation, esp. his medical and educational bills.
                                      • He believed that those measures would eventually benefit black Americans at leat as much as special legislation on civil rights. Bold moves for racial justice would have to wait
                                      • After the wave of sit-ins across the South in 1960, groups of Freedom Riders fanned out to end segregation in facilities serving interstate bus passangers.
                                      • A white mob torched a Freedom Ride bus in May 1961 and Attorney General Robert Kennedy's personal representative was beaten unconcious in another anti-Freedom Ride riot in Montgomery.
                                      • Washington dispatched federal marshals to protect the Freedom Riders.
                                      • The Kennedys proved ultra-wary about the political associates of Martin Luther King Jr.
                                        • Fearful of embarassing revelations that some of King's advisors had communist affiliations Robert Kennedy ordered FBI director J. Edgar Hoover to wiretap King's phone in late 1963
                                        • Although blacks constituted nearly half of the citys pop. they made up fewer than %15 of the citys voters.
                                        • Peaceful civil rights marchers were repeatedly repelled by police with attack dogs and electric cattle prods.
                                        • High pressure water hoses were directed at civil rights demonstraters even.

                                        The Killing of Kennedy

                                        • November 22, 1963. Violence was haunting America in the mid-1960s
                                        • Dallas, Texas, JFK was in an open limo when he was shot in the brain & died in seconds
                                        • the alleged assassin was Lee Harvey Oswald who was shot to death in front of TV cameras by a self-appointed avenger: Jack Ruby
                                        • Chief Justice Warren's offical investigation couldn't quiet doubts and theories about what really happened
                                        • Vice President LBJ was sworn in on a plane back to Washington w. Kennedy's body
                                          • though he distrusted Kennedy's team, he kept most of them and continued to follow JFK's policies
                                          • he was in office for approx. 1000 days
                                          • he was remembered more for his ideals and spirit than the major goals he achieved
                                          • he had busted the myth that a Catholic could not be trusted w. the Presidency

                                          The LBJ Brand on the Presidency

                                          • 6 foot 3 Texan Lyndon Baines Johnson was the new President
                                            • was first sent to Washington in 1937 as a 29 yr old congressman
                                            • saw FDR as his policial "daddy", he seriously supported New Deal actions
                                              • but when he lost a Senate race in 1937, he realized that liberal politics do not get you votes in Texas, so he leaned to the right and won a seat in the Senate by a landslide ["Landslide Lyndon"]
                                              • gave the "Johnson Treatment": backslapping, flesh-pressing (?), arm-twisting to friend and foe
                                              • the Pope gave him a 14th century painting from the Vatican art collection LBJ gave him a bust [sculpture/painting from basically the shoulders & up]
                                              • banned racial discrimination in most private facilities open to the public, inclu. theatres, hospitals & restaurants
                                              • strengthened fed. gov't's power to end segregation in schools and other public places
                                              • created the Equal Emplyment Opportunity Commission (EEOC) to elimiate discrimitation during job hirings
                                              • conservatives tried to add sexual discrimination to the bill but it backfired
                                                • but the act's Title VII passed w/ the sexual clause
                                                • a bunch of New Dealish economic & welfare measures to transform American life

                                                Johnson Battles Goldwater in 1964

                                                • In election of 1964 Johnson was nominated by the Democrats and the Republican nominee was Barry Goldwater.
                                                • Goldwater attacked the federal income tax, the Social Security system, the Tennessee Valley Authority, civil rights legislation, the nuclear test-ban treaty, and most loudly, the Great Society.
                                                • Democrats exploited the image of Goldwater as a trigger happy cowboy who would "Barry us" in the debris of World War II
                                                • Johnson seized upon the Tonkin Gulf episode early in Aug. 1964
                                                  • 2 American destroyers were allegedly fired upon by th North Vietnamese on Aug 2 and 4, although exactly what happened still remains unclear. Johnson promptly called the attack "unprovoked" and moved swiftly to make political hay out of the episode
                                                  • He ordered a "limited" retaliatory air raid against Norht Vietnamese bases
                                                  • Johnson also used the incident to spur conressional passage of the all-purpose Tonkin Gulf Resolution

                                                  The Great Society Congress

                                                  • Johnson’s victory smashed the conservative congressional coalition (Southern Democrats and Northern Republicans)
                                                  • Much legislation was passed, only comparable to the One Hundred Days Congress (1933)
                                                    • The growing economy made Johnson feel he could deliver Democratic promises of social reform
                                                    • The Department of Transportation
                                                    • The Department of Housing and Urban Development (HUD)
                                                    • Designed to lift the level of American cultural life
                                                    • LBJ signed this education bill in the humble one room Texas schoolhouse that he attended
                                                    • Welcomed by millions without medical insurance
                                                    • Much like the New Deal Programs of FDR

                                                    **Improved the lives of millions but undermined the Federal Government’s financial health


                                                    Contents

                                                    Wars Edit

                                                    • The Cold War (1947–1991)
                                                      • The Vietnam War (1955–1975)
                                                        • 1961 – Substantial (approximately 700) American advisory forces first arrive in Vietnam.
                                                        • 1962 – By mid-1962, the number of U.S. military advisers in South Vietnam had risen from 900 to 12,000.
                                                        • 1963 – By the time of U.S. President John F. Kennedy's death there were 16,000 American military personnel in South Vietnam, up from Eisenhower's 900 advisors to cope with rising guerrilla activity in Vietnam. [12]
                                                        • 1964 – In direct response to the minor naval engagement known as the Gulf of Tonkin incident which occurred on 2 August 1964, the Gulf of Tonkin Resolution, a joint resolution of the U.S. Congress, was passed on 10 August 1964. The resolution gave U.S. President Lyndon B. Johnson authorization, without a formal declaration of war by Congress, for the use of military force in Southeast Asia. The Johnson administration subsequently cited the resolution as legal authority for its rapid escalation of U.S. military involvement in the Vietnam War. [13]
                                                        • 1966 – After 1966, with the draft in place more than 500,000 troops were sent to Vietnam by the Johnson administration and college attendance soars.
                                                          (June 1967) – a war between Israel and the neighboring states of Egypt, Jordan, and Syria. The Arab states of Iraq, Saudi Arabia, Sudan, Tunisia, Morocco and Algeria also contributed troops and arms. [14] At the war's end, Israel had gained control of the Sinai Peninsula, the Gaza Strip, the West Bank, East Jerusalem, and the Golan Heights. The results of the war affect the geopolitics of the region to this day.
                                                        • The Algerian War came to a close in 1962.
                                                        • The Nigeria Civil War began in 1967.
                                                        • Civil wars in Laos and Sudan rage on throughout the decade.
                                                        • The Al-Wadiah War was a military conflict which broke out on 27 November 1969 between Saudi Arabia and the People's Republic of South Yemen.

                                                        Internal conflicts Edit

                                                          (1966–1976) – a period of widespread social and political upheaval in the People's Republic of China which was launched by Mao Zedong, the chairman of the Communist Party of China. Mao alleged that "liberal bourgeois" elements were permeating the party and society at large and that they wanted to restore capitalism. Mao insisted that these elements be removed through post-revolutionary class struggle by mobilizing the thoughts and actions of China's youth, who formed Red Guards groups around the country. The movement subsequently spread into the military, urban workers, and the party leadership itself. Although Mao himself officially declared the Cultural Revolution to have ended in 1969, the power struggles and political instability between 1969 and the arrest of the Gang of Four in 1976 are now also widely regarded as part of the Revolution.
                                                    • The Naxalite movement in India began in 1967 with an armed uprising of tribals against local landlords in the village of Naxalbari, West Bengal, led by certain leaders of the Communist Party of India (Marxist). The movement was influenced by Mao Zedong's ideology and spread to many tribal districts in Eastern India, gaining strong support among the radical urban youth. After counter-insurgency operations by the police, military and paramilitary forces, the movement fragmented but is still active in many districts. in Northern Ireland began with the rise of the Northern Ireland civil rights movement in the mid-1960s, the conflict continued into the later 1990s.
                                                    • The Compton's Cafeteria Riot occurred in August 1966 in the Tenderloin district of San Francisco. This incident was one of the first recorded transgender riots in United States history, preceding the more famous 1969 Stonewall Riots in New York City by three years.
                                                    • The Stonewall riots occurred in June 1969 in New York City. The Stonewall riots were a series of spontaneous, violent demonstrations against a police raid that took place in the Stonewall Inn, in the Greenwich Village neighborhood of New York City. They are frequently cited as the first instance in American history when people in the homosexual community fought back against a government-sponsored system that persecuted sexual minorities, and they have become the defining event that marked the start of the gay rights movement in the United States and around the world.
                                                    • In 1967, the National Farmers Organization withheld milk supplies for 15 days as part of an effort to induce a quota system to stabilize prices. .
                                                    • Mass socialist or Communist movement in most European countries (particularly France and Italy), with which the student-based new left was able to forge a connection. The most spectacular manifestation of this was the May student revolt of 1968 in Paris that linked up with a general strike of ten million workers called by the trade unions and for a few days seemed capable of overthrowing the government of Charles de Gaulle. De Gaulle went off to visit French troops in Germany to check on their loyalty. Major concessions were won for trade union rights, higher minimum wages and better working conditions.
                                                    • University students protested in the hundreds of thousands against the Vietnam War in London, Paris, Berlin and Rome.
                                                    • In Eastern Europe students also drew inspiration from the protests in the West. In Poland and Yugoslavia they protested against restrictions on free speech by communist regimes.
                                                    • The Tlatelolco massacre – was a government massacre of student and civilian protesters and bystanders that took place during the afternoon and night of 2 October 1968, in the Plaza de las Tres Culturas in the Tlatelolco section of Mexico City.
                                                    • Coups Edit

                                                      Prominent coups d'état of the decade included:

                                                      • On 27 May 1960, a coup in Turkey led by Cemal Gürsel and Cemal Madanoğlu overthrew the government of Adnan Menderes.
                                                      • On 16 May 1961, a coup in South Korea led by army officer Park Chung-hee made the establishment of temporary military rule.
                                                      • In 1963, a coup in South Viet Nam leads to the death of President Ngô Đình Diệm and the establishment of temporary military rule.
                                                      • On 21 April 1967, in Greece a group of colonels established a military dictatorship for seven years.
                                                      • In 1968, a coup in Iraq led to the overthrow of Abdul Rahman Arif by the Arab SocialistBaath Party.
                                                      • On 1 September 1969, a small group of military officers led by the army officer Muammar Gaddafi overthrows monarchy in Libya.

                                                      Nuclear threats Edit

                                                      • The Cuban Missile Crisis (16–28 October 1962) – a near-military confrontation between the U.S. and the Soviet Union about the presence of Soviet missiles in Cuba. After an American Naval (quarantine) blockade of Cuba the Soviet Union under the leadership of Nikita Khrushchev agreed to remove their missiles from Cuba in exchange for the U.S. removing its missiles from Turkey.
                                                      • On 13 February 1960, France detonated its first atomic bomb. France possessed a hydrogen bomb by 1968.
                                                      • On 16 October 1964, China detonated its first atomic bomb. China possessed a hydrogen bomb by 1967.

                                                      Decolonization and independence Edit

                                                      • The transformation of Africa from colonialism to independence in what is known as the decolonisation of Africa dramatically accelerated during the decade, with 32 countries gaining independence between 1960 and 1968, marking the end of the European empires that once dominated the African continent. However, the noble aspirations of these new nations quickly faded, [citation needed] and many states descended into anarchy, kleptocracy, dictatorships, and/or civil war. The road to prosperity has been difficult: As of 2011 [update] , by many measures Africa continues to possess the poorest population[15] in the world as well as the lowestlife expectancy.

                                                      Prominent political events Edit

                                                      North America Edit

                                                      United States Edit
                                                      • 1960 – 1960 United States presidential election – The very close campaign was the series of four Kennedy–Nixon debates they were the first presidential debates held on television. Kennedy won a close election.
                                                      • 1961 – President John F. Kennedy promised some more aggressive confrontation with the Soviet Union he also established the Peace Corps.
                                                      • 1963 – Betty Friedan published the book The Feminine Mystique, reawakening the feminist movement and being largely responsible for its second wave.
                                                      • 1963 – Civil rights becomes a central issue, as the Birmingham campaign and Birmingham riot lead to President Kennedy's Civil Rights Address, Martin Luther King Jr.'s "I Have a Dream" speech at the March on Washington, and the 16th Street Baptist Church Bombing
                                                      • 1963 – Kennedy was assassinated and replaced by Vice President Lyndon Johnson. The nation was in shock. For the next half-century, conspiracy theorists concocted numerous alternative explanations to the official report that a lone gunman killed Kennedy.
                                                      • 1964 – Johnson pressed for civil rights legislation. Civil Rights Act of 1964 signed into law by President Lyndon B. Johnson. This landmark piece of legislation in the United States outlawed racial segregation in schools, public places, and employment. The first black riots erupt in major cities.
                                                      • 1964 – Johnson was reelected over Conservative spokesman Senator Barry Goldwater by wide landslide Liberals gained full control of Congress.
                                                      • 1964 – Wilderness Act signed into law by President Lyndon B. Johnson on 3 September.
                                                      • 1965 – After the events of the Selma to Montgomery marches the National Voting Rights Act of 1965 was lobbied for, and then signed into law, by President Lyndon B. Johnson. The Voting Rights Act outlawed discriminatory voting practices that had caused the widespread disenfranchisement of African Americans in the United States.
                                                      • 1968 – U.S. President Richard M. Nixon was elected defeating Vice President Hubert H. Humphrey in November.
                                                      • 1969 – U.S. President Richard Nixon was inaugurated in January 1969 promised "peace with honor" to end the Vietnam War.
                                                      Canada Edit
                                                        in Quebec altered the province-city-state into a more secular society. The Jean Lesage Liberal government created a welfare state État-Providence and fomented the rise of active nationalism among Francophone French-speaking Quebecer|Québécois.
                                                  • On 15 February 1965, the new Flag of Canada was adopted in Canada, after much anticipated debate known as the Great Canadian Flag Debate.
                                                  • In 1960, the Canadian Bill of Rights becomes law, and suffrage, and the right for any Canadian citizen to vote, was finally adopted by John Diefenbaker's Progressive Conservative government. The new election act allowed First Nations people to vote for the first time.
                                                  • Mexico Edit
                                                    • The student and New Left protests in 1968 coincided with political upheavals in a number of other countries. Although these events often sprung from completely different causes, they were influenced by reports and images of what was happening in the United States and France. [16]

                                                    Europe Edit

                                                    • British Prime Minister Harold Macmillan delivered his "Wind of Change" speech in 1960.
                                                    • Construction of the Berlin Wall 1961 to prevent East Germans from escaping to the West. [17] calls the Second Vatican Council of the Catholic Church, continued by Pope Paul VI, which met from 11 October 1962, until 8 December 1965. [18]
                                                    • In October 1964, Soviet leader Nikita Khrushchev was expelled from office due to his increasingly erratic and authoritarian behavior. Leonid Brezhnev and Alexei Kosygin then became the new leaders of the Soviet Union. [19]
                                                    • In Czechoslovakia, 1968 was the year of Alexander Dubček's Prague Spring, a source of inspiration to many Western leftists who admired Dubček's "socialism with a human face". The Soviet invasion of Czechoslovakia in August ended these hopes and also fatally damaged the chances of the orthodox communist parties drawing many recruits from the student protest movement. [20]

                                                    Asia Edit

                                                    China Edit
                                                    • Relations with the United States remained hostile during the 1960s, although representatives from both countries held periodic meetings in Warsaw, Poland (since there was no U.S. embassy in China). President Kennedy had plans to restore Sino-US relations, but his assassination, the war in Vietnam, and the Cultural Revolution put an end to that. Not until Richard Nixon took office in 1969 was there another opportunity.
                                                    • Following Soviet leader Nikita Khrushchev's expulsion in 1964, Sino-Soviet relations devolved into open hostility. The Chinese were deeply disturbed by the Soviet suppression of the Prague Spring in 1968, as the latter now claimed the right to intervene in any country it saw as deviating from the correct path of socialism. Finally, in March 1969, armed clashes took place along the Sino-Soviet border in Manchuria. This drove the Chinese to restore relations with the U.S., as Mao Zedong decided that the Soviet Union was a much greater threat against them.
                                                    India Edit
                                                    • In India a literary and cultural movement started in Calcutta, Patna, and other cities by a group of writers and painters who called themselves "Hungryalists", or members of the Hungry generation. The band of writers wanted to change virtually everything and were arrested with several cases filed against them on various charges. They ultimately won these cases. [21]

                                                    Africa Edit

                                                    • On 1 September 1969, the Libyan monarchy was overthrown, and a radical, revolutionary, government headed by Col. Muammar al-Gadaffi took power.

                                                    South America Edit

                                                    • In 1964, a successful coup against the democratically elected government of Brazilian president João Goulart, initiated a military dictatorship that caused over 20 years of oppression.
                                                    • The Argentine revolutionary Ernesto "Che" Guevara travelled to Africa and then Bolivia in his campaigning to spread worldwide revolution. He was captured and executed in 1967 by the Bolivian army, and afterwards became an iconic figure for the left wing around the world. took power by a coup in Peru in 1968.

                                                    The decade began with a recession from 1960 to 1961, at that time unemployment was considered high at around 7%. In his campaign, John F. Kennedy promised to "get America moving again." His goal was economic growth of 4–6% per year and unemployment below 4%. To do this, he instituted a 7% tax credit for businesses that invest in new plants and equipment. By the end of the decade, median family income had risen from $8,540 in 1963 to $10,770 by 1969. [22]

                                                    Although the first half of the decade had low inflation, by 1966 Kennedy's tax credit had reduced unemployment to 3.7% and inflation remained below 2%. With the economy booming Johnson began his "Great Society" which vastly expanded social programs. By the end of the decade under Nixon, the combined inflation and unemployment rate known as the misery index (economics) had exploded to nearly 10% with inflation at 6.2% and unemployment at 3.5% and by 1975 the misery index was almost 20%. [23]

                                                    Prominent assassinations, targeted killings, and assassination attempts include:

                                                    • 12 October 1960 – Inejiro Asanuma, leader of the Japan Socialist Party
                                                    • 17 January 1961 – Patrice Lumumba, the Prime Minister of the Democratic Republic of the Congo Maurice Mpolo, Minister of Youth and Sports Joseph Okito, Vice-President of the Senate. Assassinated by a Belgian and Congolese firing squad outside Lubumbashi.
                                                    • 20 February 1961 Alphonse Songolo, former Minister of Communications of the Democratic Republic of the Congo Gilbert Pongo, intelligence officer and communications official. Shot in Kisangani.
                                                    • 30 May 1961 – Rafael Trujillo Dictator of Dominican Republic for 31 years, by a number of plotters including a general in his army.
                                                    • 13 January 1963 – Sylvanus Olympio, the Prime Minister of Togo, is killed during the 1963 Togolese coup d'état. His body is dumped in front of the U.S. embassy in Lomé.
                                                    • 27 May 1963 – Grigoris Lambrakis, Greek left-wing MP by far-right extremists with connections to the police and the army in Thessaloniki.
                                                    • 12 June 1963 – Medgar Evers, an NAACP field secretary. Assassinated by Byron De La Beckwith, a member of the Ku Klux Klan in Jackson, Mississippi.
                                                    • 2 November 1963 – Ngô Đình Diệm, President of South Vietnam, along with his brother and chief political adviser, Ngô Đình Nhu. Assassinated by Dương Hiếu Nghĩa and Nguyễn Văn Nhung in the back of an armoured personnel carrier.
                                                    • 22 November 1963 – John F. Kennedy, President of the United States. Assassinated allegedly by Lee Harvey Oswald while riding in a motorcade through Dealey Plaza in Dallas, Texas.
                                                    • 24 November 1963 – Lee Harvey Oswald, suspected assassin of President of the United States John F. Kennedy and Dallas Police Department officer J. D. Tippit. Assassinated by Jack Ruby on live television in the basement of the Dallas Police Department headquarters.
                                                    • 19 July 1964 – Jason Sendwe, President of North Katanga Province, Democratic Republic of the Congo. Executed by Simba rebels in Albertville.
                                                    • 11 December 1964 – Sam Cooke, American singer-songwriter and civil rights activist, was shot at the age of 33 in the Hacienda Motel, in Los Angeles, California.
                                                    • 13 February 1965 – Humberto Delgado. Assassinated by Portuguese dictator Salazar's political police PIDE in Spain, near the Portuguese border.
                                                    • 21 February 1965 – Malcolm X. Assassinated by members of the Nation of Islam in New York City. There is a dispute about which members killed Malcolm X.
                                                    • 6 September 1966 – Hendrik Verwoerd, Prime Minister of South Africa and architect of apartheid was stabbed to death by Dimitri Tsafendas, a parliamentary messenger. He survived a previous attempt on his life in 1960.
                                                    • 25 August 1967 – George Lincoln Rockwell, leader of the American Nazi Party. Assassinated by John Patler in Arlington, Virginia.
                                                    • 9 October 1967 – Che Guevara, assassinated by the CIA and Bolivian army. [24]
                                                    • 4 April 1968 – Martin Luther King Jr., civil rights leader. Assassinated by James Earl Ray in Memphis, Tennessee.
                                                    • 5 June 1968 – Robert F. Kennedy, United States Senator. Assassinated by Sirhan Sirhan in Los Angeles, after taking California in the presidential national primaries.
                                                    • 4 December 1969 – Fred Hampton. [25] [circular reference] Assassinated in Chicago by the Chicago Police Department.
                                                    • The 1960 Valdivia earthquake, also known as the Great Chilean earthquake, is to date the most powerful earthquake ever recorded, rating 9.5 on the moment magnitude scale. It caused localized tsunamis that severely battered the Chilean coast, with waves up to 25 meters (82 ft). The main tsunami raced across the Pacific Ocean and devastated Hilo, Hawaii. was a 6.1 moment magnitude earthquake which occurred in Skopje, SR Macedonia (present-day Republic of Macedonia) on 26 July 1963 which killed over 1,070 people, injured between 3,000 and 4,000 and left more than 200,000 people homeless. About 80% of the city was destroyed.
                                                    • 1963 – Vajont dam disaster – The Vajont dam flood in Italy was caused by a mountain sliding in the dam, and causing a flood wave that killed approximately 2,000 people in the towns in its path.
                                                    • 1964 – The Good Friday earthquake, the most powerful earthquake recorded in the U.S. and North America, struck Alaska and killed 143 people.
                                                    • 1965 – Hurricane Betsy caused severe damage to the U.S. Gulf Coast, especially in the state of Louisiana.
                                                    • 1969 – The Cuyahoga River caught fire in Ohio. Fires had erupted on the river many times, including 22 June 1969, when a river fire captured the attention of Time magazine, which described the Cuyahoga as the river that "oozes rather than flows" and in which a person "does not drown but decays." This helped spur legislative action on water pollution control resulting in the Clean Water Act, Great Lakes Water Quality Agreement, and the creation of the federal Environmental Protection Agency.
                                                    • 1969 – Hurricane Camille hit the U.S. Gulf Coast at Category 5 Status. It peaked and made landfall with 175 mph (280 km/h) winds and caused $1.42 billion (1969 USD) in damages.
                                                    • On 16 December 1960, a United Airlines DC-8 and a Trans World Airlines Lockheed Constellation collided over New York City and crashed, killing 134 people.
                                                    • On 15 February 1961, Sabena Flight 548 crashed on its way to Brussels, Belgium, killing all 72 passengers on board and 1 person on the ground. Among those killed were all 18 members of the US figure skating team, on their way to the World Championships.
                                                    • On 16 March 1962, Flying Tiger Line Flight 739, a Lockheed Super Constellation, inexplicably disappeared over the Western Pacific, leaving all 107 on board presumed dead. Since the wreckage of the aircraft is lost to this day, the cause of the crash remains a mystery.
                                                    • On 3 June 1962, Air France Flight 007, a Boeing 707, crashed on takeoff from Paris. 130 people were killed in the crash while 2 survived.
                                                    • On 20 May 1965, PIA Flight 705 crashed on approach to Cairo, Egypt. 121 died while 6 survived.
                                                    • On 4 February 1966, All Nippon Airways Flight 60, a Boeing 727, plunged into Tokyo Bay for reasons unknown. All 133 people on board died.
                                                    • On 5 March 1966, BOAC Flight 911 broke up in mid-air and crashed on the slopes of Mount Fuji. All 124 aboard died.
                                                    • On 8 December 1966, the car ferry SS Heraklion sank in the Aegean Sea during a storm, killing 217 people.
                                                    • On 16 March 1969, a DC-9 operating Viasa Flight 742 crashed in the Venezuelan city of Maracaibo. A total of 155 people died in the crash.

                                                    Counterculture and social revolution Edit

                                                    In the second half of the decade, young people began to revolt against the conservative norms of the time, as well as remove themselves from mainstream liberalism, in particular the high level of materialism which was so common during the era. This created a "counterculture" that sparked a social revolution throughout much of the Western world. It began in the United States as a reaction against the conservatism and social conformity of the 1950s, and the U.S. government's extensive military intervention in Vietnam. The youth involved in the popular social aspects of the movement became known as hippies. These groups created a movement toward liberation in society, including the sexual revolution, questioning authority and government, and demanding more freedoms and rights for women and minorities. The Underground Press, a widespread, eclectic collection of newspapers served as a unifying medium for the counterculture. The movement was also marked by the first widespread, socially accepted drug use (including LSD and marijuana) and psychedelic music.

                                                    Anti-war movement Edit

                                                    The war in Vietnam would eventually lead to a commitment of over half a million American troops, resulting in over 58,500 American deaths and producing a large-scale antiwar movement in the United States. As late as the end of 1965, few Americans protested the American involvement in Vietnam, but as the war dragged on and the body count continued to climb, civil unrest escalated. Students became a powerful and disruptive force and university campuses sparked a national debate over the war. As the movement's ideals spread beyond college campuses, doubts about the war also began to appear within the administration itself. A mass movement began rising in opposition to the Vietnam War, ending in the massive Moratorium protests in 1969, as well as the movement of resistance to conscription ("the Draft") for the war. [ citation needed ]

                                                    The antiwar movement was initially based on the older 1950s Peace movement, heavily influenced by the American Communist Party, but by the mid-1960s it outgrew this and became a broad-based mass movement centered in universities and churches: one kind of protest was called a "sit-in". Other terms heard in the United States included "the Draft", "draft dodger", "conscientious objector", and "Vietnam vet". Voter age-limits were challenged by the phrase: "If you're old enough to die for your country, you're old enough to vote."

                                                    Civil rights movement Edit

                                                    Beginning in the mid-1950s and continuing into the late 1960s, African-Americans in the United States aimed at outlawing racial discrimination against black Americans and voting rights to them. This article covers the phase of the movement between 1955 and 1968, particularly in the South. The emergence of the Black Power movement, which lasted roughly from 1966 to 1975, enlarged the aims of the civil rights movement to include racial dignity, economic and political self-sufficiency, and anti-imperialism.

                                                    The movement was characterized by major campaigns of civil resistance. Between 1955 and 1968, acts of civil disobedience and nonviolent protest produced crisis situations between activists and government authorities. Federal, state, and local governments, businesses, and communities often had to respond immediately to these situations that highlighted the inequities faced by African Americans. Forms of protest and/or civil disobedience included boycotts such as the successful Montgomery bus boycott (1955–1956) in Alabama "sit-ins" such as the influential Greensboro sit-ins (1960) in North Carolina marches, such as the Selma to Montgomery marches (1965) in Alabama and a wide range of other nonviolent activities.

                                                    Noted legislative achievements during this phase of the civil rights movement were passage of Civil Rights Act of 1964, [26] that banned discrimination based on "race, color, religion, or national origin" in employment practices and public accommodations the Voting Rights Act of 1965, that restored and protected voting rights the Immigration and Nationality Services Act of 1965, that dramatically opened entry to the U.S. to immigrants other than traditional European groups and the Fair Housing Act of 1968, that banned discrimination in the sale or rental of housing.

                                                    Hispanic and Chicano movement Edit

                                                    Another large ethnic minority group, the Mexican-Americans, are among other Hispanics in the U.S. who fought to end racial discrimination and socioeconomic disparity. The largest Mexican-American populations was in the Southwestern United States, such as California with over 1 million Chicanos in Los Angeles alone, and Texas where Jim Crow laws included Mexican-Americans as "non-white" in some instances to be legally segregated.

                                                    Socially, the Chicano Movement addressed what it perceived to be negative ethnic stereotypes of Mexicans in mass media and the American consciousness. It did so through the creation of works of literary and visual art that validated Mexican-American ethnicity and culture. Chicanos fought to end social stigmas such as the usage of the Spanish language and advocated official bilingualism in federal and state governments.

                                                    The Chicano Movement also addressed discrimination in public and private institutions. Early in the twentieth century, Mexican Americans formed organizations to protect themselves from discrimination. One of those organizations, the League of United Latin American Citizens, was formed in 1929 and remains active today. [27]

                                                    The movement gained momentum after World War II when groups such as the American G.I. Forum, which was formed by returning Mexican American veterans, joined in the efforts by other civil rights organizations. [28]

                                                    Mexican-American civil-rights activists achieved several major legal victories including the 1947 Mendez v. Westminster U.S. Supreme Court ruling which declared that segregating children of "Mexican and Latin descent" was unconstitutional and the 1954 Hernandez v. Texas ruling which declared that Mexican Americans and other racial groups in the United States were entitled to equal protection under the 14th Amendment of the U.S. Constitution. [29] [30]

                                                    The most prominent civil-rights organization in the Mexican-American community, the Mexican American Legal Defense and Educational Fund (MALDEF), was founded in 1968. [31] Although modeled after the NAACP Legal Defense and Educational Fund, MALDEF has also taken on many of the functions of other organizations, including political advocacy and training of local leaders.

                                                    Meanwhile, Puerto Ricans in the U.S. mainland fought against racism, police brutality and socioeconomic problems affecting the three million Puerto Ricans residing in the 50 states. The main concentration of the population was in New York City.

                                                    In the 1960s and the following 1970s, Hispanic-American culture was on the rebound like ethnic music, foods, culture and identity both became popular and assimilated into the American mainstream. Spanish-language television networks, radio stations and newspapers increased in presence across the country, especially in U.S.–Mexican border towns and East Coast cities like New York City, and the growth of the Cuban American community in Miami, Florida.

                                                    The multitude of discrimination at this time represented an inhuman side to a society that in the 1960s was upheld as a world and industry leader. The issues of civil rights and warfare became major points of reflection of virtue and democracy, what once was viewed as traditional and inconsequential was now becoming the significance in the turning point of a culture. A document known as the Port Huron Statement exemplifies these two conditions perfectly in its first hand depiction, "while these and other problems either directly oppressed us or rankled our consciences and became our own subjective concerns, we began to see complicated and disturbing paradoxes in our surrounding America. The declaration "all men are created equal. " rang hollow before the facts of Negro life in the South and the big cities of the North. The proclaimed peaceful intentions of the United States contradicted its economic and military investments in the Cold War status quo." These intolerable issues became too visible to ignore therefore its repercussions were feared greatly, the realization that we as individuals take the responsibility for encounter and resolution in our lives issues was an emerging idealism of the 1960s.

                                                    Second-wave feminism Edit

                                                    A second wave of feminism in the United States and around the world gained momentum in the early 1960s. While the first wave of the early 20th century was centered on gaining suffrage and overturning de jure inequalities, the second wave was focused on changing cultural and social norms and de facto inequalities associated with women. At the time, a woman's place was generally seen as being in the home, and they were excluded from many jobs and professions. In the U.S., a Presidential Commission on the Status of Women found discrimination against women in the workplace and every other aspect of life, a revelation which launched two decades of prominent women-centered legal reforms (i.e., the Equal Pay Act of 1963, Title IX, etc.) which broke down the last remaining legal barriers to women's personal freedom and professional success.

                                                    Feminists took to the streets, marching and protesting, authoring books and debating to change social and political views that limited women. In 1963, with Betty Friedan's book, The Feminine Mystique, the role of women in society, and in public and private life was questioned. By 1966, the movement was beginning to grow in size and power as women's group spread across the country and Friedan, along with other feminists, founded the National Organization for Women. In 1968, "Women's Liberation" became a household term as, for the first time, the new women's movement eclipsed the civil rights movement when New York Radical Women, led by Robin Morgan, protested the annual Miss America pageant in Atlantic City, New Jersey. The movement continued throughout the next decades. Gloria Steinem was a key feminist.

                                                    Gay rights movement Edit

                                                    The United States, in the middle of a social revolution, led the world in LGBT rights in the late 1960s and early 1970s. Inspired by the civil-rights movement and the women's movement, early gay-rights pioneers had begun, by the 1960s, to build a movement. These groups were rather conservative in their practices, emphasizing that gay men and women are no different from those who are straight and deserve full equality. This philosophy would be dominant again after AIDS, but by the very end of the 1960s, the movement's goals would change and become more radical, demanding a right to be different, and encouraging gay pride.

                                                    The symbolic birth of the gay rights movement would not come until the decade had almost come to a close. Gays were not allowed by law to congregate. Gay establishments such as the Stonewall Inn in New York City were routinely raided by the police to arrest gay people. On a night in late June 1969, LGBT people resisted, for the first time, a police raid, and rebelled openly in the streets. This uprising called the Stonewall Riots began a new period of the LGBT rights movement that in the next decade would cause dramatic change both inside the LGBT community and in the mainstream American culture.

                                                    New Left Edit

                                                    The rapid rise of a "New Left" applied the class perspective of Marxism to postwar America, but had little organizational connection with older Marxist organizations such as the Communist Party, and even went as far as to reject organized labor as the basis of a unified left-wing movement. Sympathetic to the ideology of C. Wright Mills, the New Left differed from the traditional left in its resistance to dogma and its emphasis on personal as well as societal change. Students for a Democratic Society (SDS) became the organizational focus of the New Left and was the prime mover behind the opposition to the War in Vietnam. The 1960s left also consisted of ephemeral campus-based Trotskyist, Maoist and anarchist groups, some of which by the end of the 1960s had turned to militancy.


                                                    Capitalism in the American Style: A Financial History of the United States

                                                    Levy also explains the basics of economic history with details that make the reader understand them more profoundly. For example, the labor of enslaved people was foundational to the nation’s wealth, but it’s difficult to envision the degree to which that was true until Levy points out that by the mid-18th century 80% of all American commodities exported to Britain were produced by enslaved people’s labor. Some of the material covered will be familiar, including the role played by joint-stock corporations in the establishment of several of the 13 Colonies, for example, or the decline of American manufacturing in the late 20th century. In the process of telling the story of the U.S. economy, Levy debunks myths and misconceptions. For example, Adam Smith, the supposed patron saint of unfettered capitalism, was not a critic of government intervention in the economy. Smith “made no categorical separation between the political and the economic, or state and market,” writes Levy. “The wealth of nations could be the result only of good policy making.” Levy’s analysis of the economy of the 13 original Colonies is a rebuttal of some of the economic grievances cited as causes of the American Revolution. For example, rather than stifling Colonial commerce, British trade regulations actually provided American merchants a guaranteed market for their goods: the British public.

                                                    He’s also adept at demonstrating that the past isn’t very different from the present. Levy points out that anyone troubled by the outsize power of business in contemporary American politics may find vindication in the 1650 book “Leviathan” by the philosopher Thomas Hobbes, in which corporations appear in a chapter titled “Those things that Weaken, or tend to the Dissolution of a Common-wealth.” (This was a concern, Levy points out, that did not prevent Hobbes from buying shares in the joint-stock company that founded Virginia.) Since economic activity doesn’t happen in a void (however much many economic theorists might wish it did), Levy also writes about literary and artistic responses to the ever-increasing commercialization of American life. This isn’t just a book about Alexander Hamilton, Henry Ford, and the Federal Reserve it’s also a book about Herman Melville, Arthur Miller, and Andy Warhol.

                                                    Levy clearly thinks the government should play a bigger part in the economy than has ever been politically possible. He considers the first decade of the 21st century, when the government had access to seemingly unlimited credit, as a “wasted opportunity to make broad-based investments in economic life” in projects like “a new energy system to capture and reduce carbon emissions.” But Levy’s gifts as a historian are most evident in his clear explanations of key economic concepts, some of them so fundamental to our world we might not realize they need explaining, such as credit. The early modern economy suffered from the scarcity of hard currency. But when English bankers realized they could issue certificates of credit to merchants in excess of the amount of gold coin in their vaults, for all practical purposes the amount of money in circulation increased “as if by some process of alchemy.”

                                                    I can honestly say I’ve never before read a work of economic history that’s actually quotable. Levy cites the psychologist John B. Watson, who ruminated during the spring of 1929 on the contemporary stock boom: “gambling in Wall Street is about the only real excitement that we have left.” And in discussing the economy 60 years later, Levy notes the weakness of private and public long-term investment, “outside military investments in such things as an interstellar missile system that did not work to fight a Cold War enemy that was collapsing anyway.” Even mortgage-backed securities – the investment vehicles that helped cause the Great Recession in 2008 – were around in some form during the 1880s, when banks were bundling and selling mortgages. And the supposedly new-fangled notion of a universal basic income was proposed by Huey Long in 1934.


                                                    Developing the American Economy

                                                    Women workers during World War II having lunch, C. & N.W. R.R., Clinton, Iowa.

                                                    Library of Congress, https://www.loc.gov/item/2017878365/

                                                    Women have always participated in developing the American economy as both workers and consumers. Middle and upper class social norms of the 18th and 19th centuries reinforced the idea that white women should not work outside the home. Poor white women, immigrant women, and women of color, however, often had to work outside the home to support themselves and their families.

                                                    Women have also used their economic power to claim rights for themselves. Advocates and agitators in the labor movement have demanded fair pay and safe working conditions for women. Others, like Harriet Tubman, disrupted the American economy by leading enslaved women and men to freedom. Until 1865, the country’s economy (in both the South and North) was heavily dependent on the forced labor of enslaved Africans and African Americans.

                                                    The 20th century and new legislation, such as the ratification of the 19th Amendment in 1920, opened new doors for women in the workforce. Recognizing the voting rights of women, the 19th Amendment inspired many women to run for political offices. Women continued to make up a larger percentage of the workforce and have a greater presence in public life over the course of the 20th century. Learn more about these women by exploring the features below.

                                                    Women in the Labor Movement

                                                    Discover the stories of people and places that have been part of the struggle to make life better for women at work.

                                                    Women of Fort Vancouver

                                                    Learn about the lives of women like Marguerite McLoughlin, a Native American woman who married a fur trader at Fort Vancouver.

                                                    Harriet Tubman: Freedom Seeker

                                                    Learning that she was to be sold due to her enslaver's financial trouble, Tubman escaped to the North. Learn more about her journey.


                                                    The Changing of America's Labor Force

                                                    America's labor force changed markedly during the 1990s. Continuing a long-term trend, the number of farmers declined. A small portion of workers had jobs in industry, while a much greater share worked in the service sector, in jobs ranging from store clerks to financial planners. If steel and shoes were no longer American manufacturing mainstays, computers and the software that make them run were.

                                                    After peaking at $290,000 million in 1992, the federal budget steadily shrank as economic growth increased tax revenues. In 1998, the government posted its first surplus in 30 years, although a huge debt—mainly in the form of promised future Social Security payments to the baby boomers—remained. Economists, surprised at the combination of rapid growth and continued low inflation, debated whether the United States had a "new economy" capable of sustaining a faster growth rate than seemed possible based on the experiences of the previous 40 years.


                                                    Watch the video: Det økonomiske kredsløb og konjunktursvingninger (July 2022).


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